Businesses in Costa Rica likely to face $300 tax next year
By a vote of 39 for and five against, the Legislative Assembly approved a $300 annual tax Monday for Costa Rican businesses, known as “sociedades anónimas” (S.A.). If the bill passes a second vote in the Legislative Assembly, perhaps as early as Thursday, the tax will be applied to Costa Rican corporations, foreign companies with offices in Costa Rica and limited liability corporations as early as January 2012.
The taxation of national businesses has been a key piece of President Laura Chinchilla’s 4-year plan since her election in May 2010. In a press release on Tuesday, the Ministry of the Presidency acknowledged its “satisfaction with the approval of the corporate tax law in the first debate.”
The press release said that the money obtained from the tax will be used to improve national security. Since announcing her intention to implement the tax in 2010, Chinchilla has said that the funds collected would be used to bolster police and security forces.
“The government has pushed this law in order to improve the amount of resources available to combat insecurity in Costa Rica,” the release said. “At least $80 million of the money generated will be used to supply the necessary equipment to police forces.”
According to the National Registry, there are 485,484 national businesses, as well as 261 foreign companies, operating in Costa Rica. Each company that qualifies as an S.A. would be required to pay ₡158,000, or around $300, every January beginning in 2012.
Security Minister Mario Zamora said Tuesday that the funds would go toward hiring and training additional officers, purchasing better equipment, and buying more law enforcement vehicles.
Combating tax evasion has also been a principal goal of the Chinchilla administration. According to the Comptroller’s Office, more than 60 percent of eligible Costa Rican taxpayers failed to make payments in 2010, a large reason for the near $3 billion national deficit.
“The approval of laws like this represents a large step in reaching the proposed goals of this administration and for creating better tools to improve the quality of life for Costa Ricans,” the release from the Ministry of the Presidency said.