Exemption for Imports Under $ 500 in Costa Rica Will Only be for Family-Destined Shipments

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    As of May 1st, the possibility of exonerating online purchases, with a value equal to or less than $ 500, will no longer be an option and since Cauca IV begins to rule. At present, consumers who buy online and bring their products through courier companies can get rid of the payment of tariffs, once every six months for that amount.

    However, with the entry into force of the fourth version of the Central American Uniform Customs Code (Cauca IV), this option will only apply to shipments from family members, informed the Director General of Customs, Gerardo Bolaños.

    For the official, current practice encourages an informal market and allows unfair competition. He assures that it only exists due to a pronouncement of the Attorney General’s Office (August 10, 2016), since “there is no express rule” that allows it.

    Current exemption

    “Exemptions do not exist. The current application is via a criterion that makes an interpretation, in my opinion, not so extensive and that is what is being applied. With Cauca IV, it is defined which are the goods that are exempt from payment and are family shipments”, explained Bolaños.

    For his part, the legal expert on customs issues, Jaime Morales, reaffirmed the explanation offered by Bolaños. He added that, rather, the new measure allows to encourage the formality of the national customs sector and the industries that depend on it since it is aligned with the best international practices.

    Both pointed out that the established amount seems negligible. However, illicit trade in the country has found an unfair advantage in the modality popularly known as “ant”. This means that informal companies use several people to exempt themselves from payments that, when added together, represent thousands of dollars.

    Bolaños did not offer a sum on the amount that the country has stopped receiving due to these instruments. However, in January 2018 the General Directorate of Customs attributed a year-on-year growth of 200% during the last four months of 2017, to this option.

    “It is not possible that, in the framework of the economic recovery, you buy a shoe, tax-exempt, and not in a store that pays taxes, to its employees, electricity. Unfair competition? Absolutely,” he asserted.

    Controversial statement

    On August 10th, 2017, through official communication number C-185-2017, the Attorney General’s Office stated that, based on article 137 of the Customs Law, users of couriers who brought purchases from the internet could apply the exoneration.

    In this way, a dispute that began at the end of the last decade was settled. The director explained that he is not clear about the start of the measure. However, as electronic commerce became popular, around 2008, it seems that it began its application.

    “I can tell you that, in 2012, I was director of customs and there we suspended the exoneration. In fact, some groups challenged this to Court Chamber IV but it did not rule in their favor. They took it to the Ombudsman’s Office and the latter sent to the Attorney General’s Office. What we currently have governs from that pronouncement,” he recalled.

    Both Bolaños and the deputy director, Wagner Quesada, regretted this situation since, they explained, it has served to encourage informal and unfair trade. Quesada pointed out that, currently, there are about 30 companies officially registered to offer the parcel service.

    However, he recalled that, especially in social networks, “fantasy companies” abound. They offer the services as if it were an established company and in good standing with the customs authorities. On the contrary, they carry out the procedures as a natural person and not under a legal identity card.

    “When you hear from most of the people that a package was detained by customs and you don’t know why. That is, we have seen people who bring up to 200 packages under a physical name to evade the authorities, ”he said. This, they added, is better defined by Article 116 of Cauca IV. It establishes that you can only apply for remittances from family members

    Better practices

    The Foreign Trade Manager of the Grant Thornton firm, Jaime Morales, pointed out that delimiting these types of figures, as Cauca does, leads the country towards the adoption of best international practices.

    In addition, it encourages formality and helps to generate a tax culture. However, he pointed out that this effort must be accompanied by work by the Executive Power to facilitate the transition from informal businesses to regulation.

    “As a country we have to find a way to facilitate trade, something that is an international principle. Let everyone pay what they have to pay but let’s make all these processes easy. That they give the possibility to buy it wherever wanted, but the important thing is to be able to import it and pay taxes”, he added.

    For the expert, the country must formalize all the companies that are engaging in electronic commerce, especially given the boom that the sector is experiencing.” One of the challenges we have as a country is to develop a tax culture,” he stated.

    Cauca IV

    Although the application of Cauca is a novelty, the country rather shows lags in its implementation. In recent days it has become more relevant as the Legislative Assembly discusses a reform to the Customs Law. At the same time, the regulation that governs the new code was published in the OFFIcial La Gaceta on March 11th.

    The implementation of Cauca IV has been requested by various unions such as the Chamber of Industries and the Chamber of Foreign Trade. They have taken the opportunity to request that the reform that Congress is discussing be in harmony with international law.

    The experts pointed out that the new code incorporates new figures such as:

    – Authorized Economic Operator: it will allow to regulate the norms of the National Customs Service for the facilitation and security in the handling of the logistics chain of the merchandise.

    – Special Customs Attorney: appointed by a legal person to be exclusively in charge of customs clearance of the goods that are consigned to him.

    – Temporary Warehouse of Goods: the possibility of storing goods for a period of 20 days is introduced.

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