Costa Rica | Additional Provisions of the Tax Plan Enforceable as of July 1, 2019

New Legislation Enacted

Author: Marco Arias, Partner - BDS, Member of Littler Global

On July 1, 2019, additional provisions of Law No. 9635, commonly known as the “Fiscal Reform,” came into effect. Although part of the Law passed in December of 2018, these provisions were not enforceable until July 1. Among these provisions are additional tax brackets of 20% and 25% for higher-salary earners, that come on top of the 10% and 15% tax brackets that have existed for many years. All of these are marginal rates. Additionally, the Law created a new Value-Added Tax (VAT) that is now in effect and impacts many aspects of a company’s regular operations.

Costa Rica | Several Companies Join “National Stoppage”

Trend

Author: Francisco Cerda, Partner - BDS, Member of Littler Global

Because of the socio-economic crisis that Nicaragua currently is battling, some companies have joined a movement or trend known as “National Stoppage” (Paro Nacional). From a legal standpoint, however, employers are not authorized to suspend work, payment of salaries, or other labor benefits.

Panama | Duration of Temporary Permits for Expats Extended

New Order or Decree

Author: Irma Marcela Montenegro Vásquez, Associate - BDS, Member of Littler Global

On May 28, 2019, the President of Panama and the Minister of Labor signed Executive Decree No. 20, which modifies the duration of temporary permits for foreign workers. Beginning on May 29, foreign nationals with work visas will receive an authorization to work that will remain valid for two years and be renewable for three additional years. Prior to this decree, permits had to be renewed annually.