Companies doing business in Nicaragua face a common set of obligations and deadlines throughout the year. Such companies are encouraged to comply with these obligations by the dates and deadlines indicated to avoid breaches or penalties that might hinder their normal operations and/or give rise to financial fines.
The following is a summary of those obligation:
ACTIVITY TO EXECUTE: Enrollment renewal before municipality.
Deadline: January 31.
Requirements: 1) Information of taxpayer duly updated. 2) Official rate: 2% calculated on the gross income earned in the last three months of 2022. Otherwise, a minimum amount applies. 3) That stockholders, directors, legal representative have no pending obligations.
Penalties: 1) It is not allowed to obtain solvency, which leaves the commercial activity in a stagnant situation, for not being in order as established by the legal framework. 2) Suspension of commercial activity.
Fines: Percentages and amounts may vary. Usually, fines shall be determined based on gross income earned and time elapsed.
ACTIVITY TO EXECUTE: Renewal of environmental endorsement.
Deadline: Simultaneous with and required by enrollment-renewal process (see above).
Requirements: When the company first registered, all documents were provided. For renewal, the same requirements are applied as for the enrollment renewal before municipality (see above). If all is correct, the form is to be filed and the rate fee paid.
Penalties: Suspension of commercial activity.
Fines: Vary according to 1) economic activity and the different goods involved in such activity, and 2) contamination and damage caused to the environment. Fines are set in municipal ordinances and the local taxation plan-municipal (plan de arbitrios).
ACTIVITY TO EXECUTE: Property tax.
Deadline: June 30 to pay prior-year IBI. (Note that the tax can be paid in two installments: 1) the first no later than March 31, and 2) the second no later than June 30. If the taxpayer pays 100% of the tax prior to the March 31 deadline for the first payment, a discount of 10% on the total due shall be applied.)
Requirements: Request an updated statement and pay. The company must have an RUC/tax ID and all taxpayer information must be duly updated.
Penalties: Payment is calculated at 1% on the first 80% of the value of the property, according to the valuation made by the municipality.
Fines: Those fines established by the Tax Law and Tributary Code are applied (Decree 3-95).
ACTIVITY TO EXECUTE: Update ultimate beneficiary owner information before the public registry.
Deadline: Annually, from the date of registration with the UBO Registry. (In accordance with the provisions of Administrative Rule 009-2021, the registration is valid for one calendar year. The period of one year is counted from the date of first registration and successively. However, any changes that occur must be duly and timely reported to the public registry at the moment they occur. If there are no changes , it will only be necessary to renew the certification with a new date for a new year since the certification in force is required to carry out any commercial activity (with banks, to appear before a public notary, to perform a contract with a provider, supplier, clients, etc.).)
Requirements: The UBO registration information must be updated annually, since it is required to carry out commercial activities and authorize public deeds before public notaries. In the event of changes (e.g., of directors, shareholders, legal representative, address), the changes must be updated at the time they occur.
Penalties: Publication for non-compliance; inability to use registry services; unable to perform notarial acts; unable to carry out banking activities; unable to carry out commercial activities in general.
Fines: Range from US$500 to US$1,000.
In addition to the above, other corporate obligations include payment of official fees and other important renewals such as the following:
- Payment of vehicle tax (due each year in January)
- Obtaining the Gas Emission Certificate applicable to all vehicles (due annually, according to the calendar year; does not apply in the case of vehicles that are less than five years old).
- Renewal of tax ID (RUC) (applies only when applicable; is not an annual requirement).
Click here to read the original client alert by Minerva Bellorín of Ally Law member firm Aczalaw Nicaragua.