Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Mexico, Costa Rica, Colombia and Uruguay

Like many other countries affected by the corona virus, Mexico and Costa Rica have also announced states of emergency with various measures. Colombia and Uruguay have announced more new tax deferrals and other social benefits to stabilise the public situation. Our teams summarise for you.

Mexico

On 30 March 2020, the government declared a state of health emergency in the country. All non-essential activities in the country’s public, private and social sectors must stop until 30 April 2020. Any non-essential company failing to respect this measure will be fined. The following measures were announced:

• Meetings of more than 50 people are prohibited. Hand washing, non-contact greeting and sneezing etiquette are recommended.
• Everyone is requested to stay at home, especially the vulnerable members of the population.
• The declaration does not impose a curfew, but must be seen as a voluntary limitation of mobility.
• On the other hand, it is indicated that the Secretariat of Finance and Public Credit (SHCP), together with the Ministry of Economy and the Ministry of Labour and Social Welfare, must take measures to establish support for companies.
• Regarding the situation of labor relations, it is fully declared in Federal Labor Law and put in force majeure by the government, that the suspension of work by force majeure is applicable, but the employers must pay full wages, except if the employers submit the legal notices and comply with the corresponding requirements, since there is a special legal process for this.
• The National Institute of Migration, the Ministry of Communications and Transportation and the Ministry of Foreign Affairs must take preventive and protective measures corresponding to the scope of their responsibilities and powers.
• The SHCP, together with the Ministry of Economy and the Ministry of Agriculture and Rural Development, must work to guarantee the food supply in the country.
• The Ministry of Welfare and the Ministry of Labour and Social Welfare must apply social support measures, while the Secretariat of Security and Civilian Protection, the Secretariat of National Defence and the Secretariat of the Navy must ensure security and safeguard strategic facilities and public communication networks.
• In general, each Secretariat of the Federal Public Administration must determine and establish the necessary measures corresponding to the material scope of its powers.
• From 30 April 2020, appropriate guidelines for the return to normal activities in the country will be issued in stages.

So far, no postponements of tax filing and tax payments have been announced, but further measures on taxation and other financial aid packages are anticipated. Ecovis Mexico is staying on top of the news and will take rapid action to assist its clients in complying with the measures. We aim to help our clients navigate through these difficult times.

Costa Rica

On 21 March 2020, the Costa Rican government announced new measures covering the following main points:

• Tax: VAT payments for March, April and May 2020 can be postponed until 31 Dec 2020. The corresponding returns must still be filed. The same measure applies to selective consumption taxes, income tax, and certain customs duties. There is a VAT exemption on commercial leases for April, May and June 2020, VAT to be cancelled.
• Social Security: The minimum tax base has been cut by 25%. There is a reduction of interest rates in payment arrangements.
  National Insurance Institute: The occupational risk rate for companies with less than 30 workers has been decreased.
• Salaries: There should be a decrease in working hours. If earnings fall by 20%, ordinary working hours are reduced by 50%. If income is reduced by 60%, the working hours should be reduced by 75%.
• Banking: A reduction of interest rates on loans. Private banks such as Bac San Jose and Scotiabank will freeze the next two instalments of pledge credits and leasing.
• Utilities: A 50% discount on electricity bills during March, April and May 2020 if consumption is higher than 2000 kWh per month.

Other measures are expected to be announced soon. Ecovis Costa Rica remains at its clients’ disposal to provide help with any urgent request and where needed. We are here to provide our best support in guiding our clients through this difficult time.

Colombia

In addition to the measures already published, the following additional tax related measures have been announced:

Tax payment deferral: For large taxpayers, payment is postponed to 15 May 2020 and 29 May 2020; for legal and natural persons, payments are postponed to 1 June 2020 and 1 July 2020.

District taxes: As a result of the COVID-19 public health crisis, the Mayor’s Office of Bogotá issued Decree 093 on March 25, 2020, which included several measures concerning district taxes:

• Payment of property tax for residential and non-residential properties is deferred until 5 June 2020, with a 10% discount. The deadline for payment without discount is 26 June 2020.
• Those who opt to pay the property tax through the Voluntary Payment by Instalments Alternative (SPAC) must submit an initial declaration through the web portal by 30 April 2020. Payment must be made in four equal instalments on 12 June, 12 August, 9 October and 11 December 2020.
• The deadline for the payment of vehicle tax, with a 10% discount, will be 3 July 2020. The deadline for payment without discount will be 24 July 2020.
• Industry and Commerce Tax (ICT): Although not found in the decree, the tax calendar issued by the Mayor’s Office of Bogotá has been amended, extending the deadlines for the two-month periods March-April and May-June, which must now both be paid on 31 July 2020.

Measures contained in External Circular 100-000004 published on 24 March 2020:

• Ordinary Shareholder Assemblies: Ordinary shareholder assemblies corresponding to the year 2019, as stipulated in article 422 of the Commercial Code, may be held until one month after the end of the declared national health emergency.
• Meetings in their own right: If no meeting is called, the assembly will meet in its own right on the business day following the month referred to in the previous paragraph at 10 am in the offices where the company operates its main administration. Under no circumstances will it be possible that meetings can be validly held in their own right before 1 April 2020 given the need to comply with the mobility restrictions established by the authorities.

ECOVIS Colombia is accompanying this situation and we will be reporting any measures that emerge with an impact on companies in general.

Uruguay

In a press conference, the Government of Uruguay announced that by 24 March 2020, the number of COVID-19 cases had risen to 189. The government also announced a series of measures to reduce the impact of the disease on the population and on the domestic economy. These measures are:

• Precautionary quarantine for elderly people: Starting on 25 March, all state employees over the age of 65 will remain in their homes to prevent exposure to the virus. Private employees over 65 from different sectors of activity will be entitled to enter the sick pay system. This measure will also apply to all employers.
  In collaboration with the Uruguayan Supermarkets Association, the government stated that from 8:30 to 10 am, supermarkets will give priority to elderly people over 65.
• Flights for tourist purposes: The President issued a decree which states that all departures from Uruguay for tourist purposes are suspended.
• COVID-19 declared occupational disease: On 25 March, Parliament will vote to declare COVID-19 an occupational disease. This will grant health insurance cover to medical and non-medical workers who contract the virus.
• Promoting remote working: As a way of promoting remote working in businesses, the Uruguayan state telecommunications service ANTEL will grant 50 gigabytes free to all users, starting on 1 April 2020. This benefit will be given strictly to the 120,000 users signed up for the basic home plan.
• Homeless people: In order to avoid the circulation of people on the streets, the government is increasing the number of shelters for homeless people over 65. In addition, a contingency centre is being constructed for these homeless people if they are under quarantine.

Ecovis Uruguay is providing support to its clients without any service interruptions.