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The Costa Rican Tax Amendment Project
In January 2011 Costa Rica initiated an important general tax law project, which has as a primary objective the amendment of the two most relevant taxes, the income tax and sale tax. The project has the following objectives: The attempt to extend the sales tax to services, because Costa Rica’s economical model is based primarily on this sector, and the modernization of income tax, on the basis of a greater taxation of capital gains, including sectors that were not included before, like companies under the regime of free trade zone and foreign banks. The project initiates the course of taxation to extraterritorial income, ensuring not only the payment of tributes by those domiciled.
Currently, the project has suffered a series of setbacks since the beginning of its proceedings at the Congress. The original text that was proposed by the Government was replaced, the adoption of an expedite legislative process by Congress and the suspension of the procedure for study by the Constitutional Court. Most recently, the annulment of all the legislative proceedings by the Constitutional Court, decision that was adopted due to the lack of publication of major changes of the project, for example the approval of motions that introduced exemptions not contemplated in the original text of the project. Therefore last April 10th the Constitutional Court annulled all the legislative procedure, as a result, the Congress must start the project proceedings all over, which in practical terms implicates that the tax amendment project will end without ever becoming Law.
Lexincorp Central America offers advice on Tax Law, throughout its offices in the region. For any of your needs, our professionals in Tax Law will be at your disposal. For more information, please reach us through our mailbox email@example.com or through our phones listed on our website www.lexincorp.com