ABOUT THE LIVING LIFE IN COSTA RICA BLOG

I (Vicki Skinner - aka "THE Sarong Goddess") created this blog in 2007 to share DETAILED Finds•Lists•Info•Events•Experiences to help bring more EASE to people living in, visiting or thinking of moving to Costa Rica since DETAILS are NOT easy to find!
I’m NOT an expert (an "expert" 2 ME knows 101%-NOT me). I believe in sharin info•helping where I can! And with over 2,200 entries, so some things might be out of date, so if you find old info PLEASE help each other by getting the updated info & sharing it with me to revise. At least you have some basic info to get you started.
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Monday, May 20, 2013

Ease of Doing Business in Costa Rica (ha! ha! ha! ha!!!) - Taxing & Taxing & Taxing & Taxing Businesses in Costa Rica. . .

Fantasizing about moving to Costa Rica and doing some sort of business?  Get your head out of the clouds - out of woo-woo-land and DO YOUR RESEARCH FIRST when it comes to ranking in the world for "ease of doing business" Costa Rica is rated towards the BOTTOM of the list and going lower and lower each year!

Go on various Message Boards (see my listing on Costa Rica Message Boards at  LivingLifeInCostaRica.blogspot.com/2012/03/message-boards-forums-on-costa-rica.html) and read OTHER people's experiences and AFTER you've done that - THEN start asking your own question (so you're not repeating previous questions which seems to tick off a LOT of people and they WILL ream you about it [welcome to how life in Costa Rica can be for some!!]).

Get over your feeling of "Oh, this will NOT be MY experience" as chances are good it WILL when it comes to doing business in Costa Rica!!!!!!!!!!

Last month 3 people I PERSONALLY know with businesses announced they were leaving Costa Rica BECAUSE of the HELL and high $$$ they were going through to keep their business legit and aligned with all the new laws, taxes and the fact that at least based on what MANY have shared with me - how OFTEN when you're getting all your permits, it seems like you're usually "missing" at least one piece of the pie which could EASILY come back to bite you in the tush when someone doesn't like you or they want your business or they're just hurt angry children acting out their unresolved Control Issues with their parents!

Here's a GREAT example of what I'm talking about (and yes - MANY countries tax businesses and people heavily - but they give BACK TO those businesses/people with services - like the basics - GOOD, RELIABLE, HIGH SPEED, even internet [and at a reasonable price because internet is MUCH more expensive them in much of the U.S.], FUNCTIONING, RELIABLE cell coverage - and the ability to make a Voice Mail Message at that [yes - one can NOT make Voice Mail Messages with most systems in Costa Rica for OVER 9 months!!!  Interesting timing it it happened after the monopoly broke up and other companies were able to come into Costa Rica to provide cellular service.  Does it sound like "You've taken away our business so we're going to show you who's boss" childish behavior/Control issues to anyone else??].  Other countries that highly tax businesses also tend to have GOOD, WELL marked roads and Infrastructure - WOULDN'T they???)


Rerstaurnat
                                                          Alice
Restaurant Alice in Playa Chiquita.

Restaurant in Playa Chiquita 
is a case study in rising fees

Bar and restaurant owners all over the country are getting shocks when they find out what new fees have been levied by a liquor law that just received approval.

One such person is John Lewis, who with his wife, Allison,  operate Restaurant Alice in Playa Chiquita on the Caribbean coast.

Earlier this month, Lewis attended a workshop set up by the Municipalidad in Bribri, Talamanca. Lewis was invited to the workshop, along with other area business owners, to learn his rights and responsibilities under Ley 9047, the new law to increase revenues by charging a fee every four months to every establishment selling liquor. 

In December 2011, Lewis and his wife moved to Playa Chiquita and bought Elena Brown’s bar and converted it to a restaurant. Elena Brown’s used to be the center of nightlife in Playa Chiquita, a small village about five kilometers south of Puerto Viejo. Lewis bought the patente, or liquor license, for $10,000, assuming it was a good investment. Restaurant Alice has had a slow start due to a slow economy and a protracted low tourist season in the Caribbean, but because of its excellent fish dishes, the restaurant has reached 14th place on Trip Advisor reviews.

In December, a year after Restaurant Alice opened for business, Lewis went to Bribri to pay the annual fee, what he believed was going to be 10 percent of his liquor sales. 

Instead, he was told the exact amount of the tax was not yet decided. He told Lewis to wait until officials informed him of the amount. So Lewis waited. When he finally received an official document stating that he owed a flat tax of 380,000 Colons, he was baffled. 

Ley 9047 states that restaurants selling liquor will pay a trimestral fee of 380,000 colons ($770 at the current rate of exchange). According to Talamanca municipal officials the fee is the lowest in Costa Rica, but it does not differentiate between low-revenue and high-revenue establishments or reduce the fee during low tourist season. 

Restaurant Alice is definitely a low-revenue. He, spends only about 150, 000 colons (about $300) on liquor every three months. Liquor is just available as a courtesy to customers who come for dinner, Lewis said. 

In one year, Lewis went from paying a tax of about 10,000 colons per year to a fee of 190,000 colons (about $385). His fee is cut in half from the 380,000-colon base salary figure because he owns the patente or business license. Still, he is being asked to pay $1,166 more a year to the municipality.

During the low tourist season, many Playa Chiquita businesses are closed because business is so slow. Ley 9047 makes no exceptions for this. Other small restaurant owners in Playa Chiquita face the same dilemma as Restaurant Alice. Some are willing to pay the new fee, reasoning that it is equivalent to purchasing a liquor license. Other owners point out that they are being pressured to sell more liquor in order to have enough money to pay the trimestral fee.

Lewis said when he asked a municipal official if there were any recourse to paying this fee, she replied that perhaps he could sell more alcohol. 

Half the amount that the bar and restaurant owners pay goes to the municipality. The rest is divided among three organizations and the Universidad Estatal a Distancia.

Some 20 percent of the total fee goes to the Unión Nacional de Gobiernos Locales. Some 5 percent goes to the Asociación Nacional de Alcaldías e Intendencias, and an equal amount goes to the Red de Mujeres Municipalistas. The university gets 20 percent for training of municipal employees, according to the law.

When lawmakers were considering the bill, they heard that some fees for liquor patentes had not been raised for years. Some bar owners, mainly in San José and other Central Valley communities were paying the equivalent of $10 to $20 a year for the right to sell alcohol.  So lawmakers moved to raise the fees.

SOURCE:  AMCostaRica.com  May 20, 2013



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