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Law No. 1054. – Signs Law

Law No. 1054. – Signs Law

On December 17, two thousand and twenty, Law No. 1054 "Law of Signs" was published in the Official Gazette No. 234, the purpose of which is to regulate advertising and propaganda that is carried out through signs located in the municipalities of the National territory.

Prior to the publication of Law 1054, advertising and propaganda was regulated for the Municipality of Managua by art..  21 of Decree 10-91 "Excise Plan of the Municipality of Managua" and through article 44 of Decree No. 455 "Municipal Excise Plan" for the rest of the country's municipalities. These articles basically established the value of the tax applicable to the signs, which ranged from C$30.00 to C$200.00. Such articles were repealed by the new Sign Law.

Until the date of entry into force of the Law of Signs, each municipality through municipal ordinances regulated established the special treatment around this tax, for which this Law somehow unifies the particular regulations of each municipality in the country, in a only regulatory body.

 What should be understood by LABEL?

According to the Law, "label" stool "the structure, element or technological means used for the placement and display of the advertisement in public or private areas, permanently or temporarily. “[1]

 Are there exceptions?

Yes. Law 1054 establishes that signs are not regulated by its provisions in the following cases:

  • When they are installed inside buildings and that are not visible from the outside.
  • Those who install natural persons in homes, to signal their profession or trade. In this case, the dimensions of these signs may not be greater than 0.50 square meters.

What is the tax I must pay and when is it paid?

The law establishes a series of parameters that must be taken into account to make the payment of the label tax, these are the following:

  1. territorial location– The tax to be paid depends on the Classification or Category of the municipality. (The classification of the municipalities goes from A to F and depends on their annual income).
  2. Sign Type– These can be fixed to buildings, fixed to the ground, mobile or temporary. The technical specifications that determine the type of sign will be subject to regulation in the Regulations of the Law, which, as of the date of publication of this article, have not been published in the Official Gazette.
  3. measure or quantity – This will depend on the type of sign according to the table indicated below

Below we incorporate the table contained in article 13 of the Law where the rate to be paid is indicated according to the conditions described above:

The sign tax must be paid in the month of January of each year in the corresponding municipality. In the event that said tax is not paid within the established term, it will be apply a fine of 5% on the rate of said tax.

You can see in the following link: Categories of Municipalities, the category of municipalities applicable for the year 2020, as of the date of publication of this note, the category of municipalities for the year 2021 has not been made official.

And just by paying the tax can you put up my sign?

No, any person who wishes to install a sign must process and obtain the "installation permit" which is valid for one calendar year and must be renewed annually; for which it must be solvent with its municipal obligations, otherwise the permit or renewal will be denied.

The permit itself has no cost, unless it is:

  • Installation of Mega Signs.
  • Installation in public space for signs fixed to the ground.

In the case of the installation of mega signs, the mega sign installation supervision fee must be paid, which has a value of USD 100.00 and in the case of the fee for the use of public space for signs fixed to the ground, the equivalent must be paid. at 5% of the annual tax applicable to the sign.

Mass Graduation Tax

Además de las tasas que hemos mencionado anteriormente, la Ley de Rótulos crea el denominado “Mass Graduation Tax”, el cual debe ser pagado por the big taxpayers que coloquen masivamente rótulos temporales en los puntos de distribución, quienes pagarán $4.00 de los Estados Unidos de América, anualmente por cada punto de distribución.

Exenciones a la Ley:

It is important to mention that Law 1054 contains exemptions from the payment of the Label Tax for some entities and activities, such as the exemption for new micro and small enterprises during the first year of operation, provided that the dimensions of the sign do not exceed 10 m2. Some other exemptions are as follows:

  • Centralized and decentralized institutions, autonomous entities, State companies, regional governments, territorial governments of native peoples, indigenous and Afro-descendant communities,
  • Red Cross,
  • fire departments,
  • public health units,
  • Churches and religious denominations with legal status, as long as the advertising is for the purposes for which they were created,
  • Municipal Entities according to Law No. 40, Law of Municipalities and its Regulations
  • Artistic expressions such as paintings or murals, as long as they do not contain commercial messages,

It should be noted that, although the entities and activities listed above enjoy an exemption from the payment of the Tax on Signs, they are obliged to manage the installation or renewal permit due.

The Law establishes a series of sanctions that will apply for non-compliance with its provisions, ranging from fines equivalent to 100% of the tax that should have been paid, to the removal of signs.

We will be publishing an update on this Law, once its regulations are published.

See here The Gazette

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