If you have a Costa Rican company you will have noticed that there are increasing legal obligations imposed by the government to keep your company current and legal. Let’s look at your obligations for 2022 so that you can avoid any penalties for failing to comply when indicated.
1. Annual Company Tax
In the month of January the annual company tax known as Impuesto a las Personas Juridicas must be paid to the Ministry of the Treasury. The deadline for payment is January 31. The amount due is based on a percentage of the base salary of a Costa Rica government office worker which is 462,200 Colones (US$728). So the approximate rates based on current exchange rates and base salary area as follows (1) Inactive companies pay 15% of base salary US$109. (2) Companies registered with the Tax Department as commercial enterprises must pay from 25% to 50% of the monthly base salary according to the gross income reported in the previous year. The annual tax in those cases will range, depending on income, between ₡115,500 to 231,000 (US$181 to US$364). There is a fine of 1% per month on the outstanding balance of the tax until paid in full. In addition, companies that have not paid the annual company tax cannot access the National Registry company recording office to make any company modifications or request company certifications. Any company that fails to pay for three consecutive years is subject to administrative dissolution. The government has already dissolved thousands of companies that were non compliant
2. Income Tax Return D-101
All Costa Rican companies will be obligated to file an Income Tax Return form D-101 for 2022. If your company is “inactive” because it does not carry on any commercial or business activity and you simply use it as an asset holding company you will still be obligated to file the new “simplified income tax declaration”. This is new for inactive companies in 2022 and is due by March 15th. On the other hand if your company has generated income which is subject to Costa Rican taxes then you must file the original version of the D-101 Income Tax declaration form.
3. The Mandatory Declaration of Beneficial Owners and Shareholders
All companies registered in Costa Rica, Trusts and Foreign subsidiaries registered in Costa Rica must file this form on an annual basis. This form is filed with the Central Bank of Costa Rica. The deadline for filing is March 31. This filing obligation imposes the highest fines of all for non compliance. The law indicates that non compliance can result in fines which range from three to one hundred base salaries ($2,000 to $76,000). They clearly want this information provided so make sure you comply to avoid any problems. Check out my article on How to File the Shareholder Beneficial Form
4. The Education and Culture Stamp Tax (Timbre de Educacion y Cultura)
Obligation to Register and Update Company data at the Tax Department. It is the obligation of every company in Costa Rica to be registered with the Ministry of the Treasury. Generally when companies are first formed they are automatically reported into the Ministry of the Treasury database. However, any changes to the company after registration such as change of address or legal representatives must be reported to the tax department.
5. Obligation to Register and Update Company data at the Tax Department
It is the obligation of every company in Costa Rica to be registered with the Ministry of the Treasury. Generally, when companies are first formed they are automatically reported into the Ministry of the Treasury database. However, any changes to the company after registration such as change of address or legal representatives must be reported to the tax department.
6. Annual company meeting and obligations
The company should hold an annual ordinary meeting to address company issues, distribution of dividends and report of annual financial results. At the same time you can review the company structure and determine if any modification of the bylaws or operating agreement are required. In reality this is generally done with companies that have multiple shareholders and business activities. Inactive holding companies tend to skip these since the shareholders tend to be individual family members. So, depending on your circumstances you can evaluate these requirements accordingly.