Tuesday, 24 November 2020

EDITORIAL: If The Law Creating the Corporations Tax Is Unconstitutional, Why Do I Have To Pay?

Waiting in line at the Banco de Costa Rica (BCR).
Waiting in line at the Banco de Costa Rica (BCR).

If you own a corporation in Costa Rica – an S.A. (Sociedad Anomina) – you know well that there is a corporations tax payable by end of January every year for the last few years.

Many foreigners (and locals) who hold their car, property or any other item of value in an S.A. and are subject to the tax.

- Advertisement -

But hold a minute, do we really have to pay now that the Constitutional Court (Sala Constitucional or Sala IV) ruled the law creating the tax null and void?

The tax was introduced by the Chinchilla administration (2010-2014) in 2011. Since we’ve bee required to pay the equivalent of a base salary (¢201.700 for the 2015 fiscal period) for each and every active corporation (half of that for inactive).

But now that Court said the law is unconstitutional, the experts say that means the law never existed on the books.

However, despite the voidance, we are being required to pay the tax, this the last year, and nothing more starting for 2016 fiscal period (Feb 1, 2015 to Jan. 31, 2016).

- Advertisement -

WAIT. If the law creating the tax is null and void, then isn’t the 2015 tax payment also nulled? Herein lies the problem.

The Ministry of Finance (Ministerio de Hacienda) says non-payment will incur fines. The Registro Nacional (National Registry) says it cannot issue certifications if the tax payment is not up to date. Again, both government agencies are asking for the payment of a tax that, if the experts are right, in law it never existed.

Jose Maria Oreamuno, tax expert at Facio & Cañas. Click here to see the video interview from Telenoticias.
Jose Maria Oreamuno, tax expert at Facio & Cañas. Click here to see the video interview from Telenoticias.

I happened to catch an interview on Telenoticias where one legal expert, Jose María Oreamumo at Facio & Cañas, one of the leading legal firm in the country, saying: “Do not pay, the law never existed and no government agency can require payment for someting that didn’t exist.”

You can see the interview (in Spanish) by clicking here. Skip to minute 1:25.

As of this morning, according to official records, only 13% of the corporations have had their tax paid, leaving 87% or roughly 475.000 of the 542.000 that have not done so.

- Advertisement -

My questions are:

  1. What happens if I don’t pay the tax?
  2. What if the Court rules that the 2015 doesn’t really have to be paid, do I get back a refund if do pay?
  3. If the law is unconstitutional, why do I have to pay the arrears (for those like me who are in arrears)

Me, I am going to wait for I have learned that in Costa Rica:

  • Never be the first to pay anything, ie. fines, taxes, etc.
  • Wait to the very last minute to pay anything
  • Don’t every pay when there is doubt/controversy whether I should pay
  • Never is a refund issued

I am not offering legal advice, just sharing my thoughts on the issue.

Pura Vida, Mae!

Time for a yodo.

 

 

 

 

 

Use the comments section below to share your views on the subject, or send me an email.

Click here to follow my rants on my personal blog on Costa Rica that I call TICO BULL.

- Advertisement -
Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Children’s Museum cancels its traditional lighting

QCOSTARICA - Although this year the traditional lighting of the Museo...

Vaccination will be ‘a necessity’ for international flights, says Qantas chief

FINANCIAL TIMES - Qantas plans to insist that passengers on international...

MOST READ

Canada’s largest city going on Covid lockdown

QTRAVEL - Canada's Prime Minister, Justin Trudeau, on Friday warned so-called Canadian "snowbirds," many of whom travel to the US and Mexico during Canadian...

At least twelve dead in the landslide in Nicaragua; more than 15 others missing

TODAY NICARAGUA - At least twelve people died in a landslide in the Macizo Peñas Blancas, in the municipality of El Tuma-La Dalia, in...

Covid-19 in Costa Rica: 1,422 news cases for Wednesday

QCOSTARICA - Wednesday night, November 18, the Ministry of Health reported 1,422 new cases of coronavirus in Costa Rica, the total now reaching 127,012...

The Best Mobile Casino Games Ranked In 2020

As the world of online casino games continues to boom in 2020, players across the globe are choosing to head to the web for...

Blind singer will choose the new Miss Costa Rica

QFARANDULA - It is said that everything enters through the eyes and more if we are talking about a beauty contest, but for Haury...

Apple will pay $113 million settlement for intentionally slowing down old iPhones

(BUSINESS INSIDER) Apple will pay a $113 million settlement in an investigation into the company's practice of intentionally slowing old iPhones down, a move...

Let's Keep This Going!

To be updated with all the latest news and information about Costa Rica and Latin America.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.