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The importance of Law No. 1054, Signs Law

On December 17th, 2020 was published the law No. 1054, Law of Signs, which charges taxes and usage fees to the advertising and publicity activity of the country’s economic actors, by the placement of signs in different municipalities of Nicaragua.  This Law eliminates the dispositions of the Municipal and Managua Tax Plans, being this law the legal guideline that will be applied by the Municipal Mayors’ Offices for the corresponding taxes.

In this law the signs are classified as follows:

  • Fixed to a building
  • Fixed to the ground
  • Movable
  • Temporary

The above classification is not definite, since there may be permissions granted for signs that do not fall under this classification. It also indicates that any taxpayer that advertises using signs, must have the authorization of the Municipals office of the place where it will be installed, being solvent with the municipality, as well as paying the corresponding exploitation fee.

The installation permit is valid for one year, however, the Annual Sign Tax regardless of the month in which the process takes place shall be paid. This Annual Tax shall be paid during the month of January of each year, so from the day this law becomes effective, it will be payable as from January 2021. Its renovation must be 45 days before the permit expires, along with the payment of the Annual Sign Tax. In the case of V-flag and tandem V-flag signs they are prohibited in this new regulation, and for those who are installed before this law came into effect, will remain in operation until the permit expires, but will not be renewed.

According to the above-mentioned, the present law establishes different tax charges to sign owners:

  • Annual sign tax
  • Masive labeling tax
  • Mega Sign Installation Supervision Fee
  • Public Space usage Fee for the installation of signs fixed to the ground

It is worth mentioning, that institutions or actions related to a social objective or for the common good, such as the Red Cross, Fire Brigades, among others are exempt from the payment of these Taxes and Fees except for the Installation Permit.

In this way, this regulation practically transforms what was previously found in two articles of different decrees into a new legal framework.

Naimeh Martina Suárez Siezar

García & Bodán