It is a subject on which most entrepreneurs constantly have questions, especially when they are notified at the address of the company for failing to pay the Business License (Patente Comercial/Municipal) after giving Notice of Beginning of Activities.

What is it?

Business License (Patente Comercial) is a tribute to be paid from who carries out an economic activity (person or company) in favor of the Municipality with jurisdiction over the domicile in which the activity is performed.

Who must pay it?

According to Article 23 of the Municipal Revenue Law “the exercise of any profession, trade, industry, commerce, art or any other gainful activity secondary or tertiary, whatever their nature or denomination, is subject to a contribution of business license, under the provisions of this law. “

What is the deadline to pay it?

It depends on what each Municipality has established in its regulations, but it is advisable to approach the Town Hall within 30 days from the Initiation of Activities in front of the Tax Authority to normalize the situation.

The Tax Authority will notify the Municipalities on companies making Beginning of Activities in its jurisdiction, so if you do not normalize, the company will receive a notice from the Municipality at the business address.

What is the amount?

Once again according to the Municipal Revenues Law “The value for twelve month license (Patente) for an equivalent amount will be between two and a half per thousand and five per thousand of the equity of each taxpayer, which may not be less than one monthly tax unit or more than four thousand monthly tax units.”

It also states that “for the purposes of this Article shall apply initial equity declared by the taxpayer if they involve new activities or the equity registered in the finished balance by December 31 immediately preceding the date on which the equity statement is presented…”

How do I pay it?

It is necessary to visit the Department of Municipal Revenue over the Municipality corresponding to the address where the activity will be performed and fill out a Business Licence (Patente Comercial) application and statement of equity. This procedure may vary from one Municipality to another, but usually in the case of companies they will need to provide the following documents:

– Documents of Incorporation of the Company.

– Copy of the declaration of Beginning of Activities in front of the Tax Authority.

– A document certifying the title under which the property where the business is performed is occupied (lease contract, certificate of ownership or other).

– Feasibility Report, building permit and final acceptance of the building where the business provided by the corresponding Department of the Municipality will develop. This document can be acquired in the municipality.

Also in case of a License (Patente) renewal or change of address, you must present balance sheets as of December 31 of the preceding year for which a patent is applied.

Santiago Henríquez C., Lawyer

Picture: Jared Erondu (CC0)