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Regulations to the Annual Corporation Tax

The regulations for the Costa Rican annual corporation tax have been published by the Ministry of the Treasury in the official Gazette (Alcance No. 114 Gaceta May 26, 2017).

This means that the law will come into effect on August 26, 2017 which is 3 months after the publication of the regulations (May 26, 2017).

In the past this tax was administered and collected by the National Registry of Costa Rica (RNP). Not anymore.   The new law transfers the administration and collection of this tax to the Department of Revenue of the Treasury Department (Tributación Directa)

What do I have to do to Register ?

According to the regulations The Department of Revenue will automatically pull all the corporation registration information into their RUT taxpayer database.  The RUT is the taxpayer registration system of the Revenue Department (Registro Unico de Contribuyentes de la Dirección General de Tributación.)

If the company does not have a RUT registration number then one will be automatically assigned. If the corporation already is registered with the tax department for other tax obligation then the corporation tax will be added to that registration profile.

What are my obligations once my corporation appears in the RUT of the Revenue Department ?

All corporations that did not have a taxpayer number in the RUT database will then have the obligation to file a form D-140 (Declaración de Modificación de Datos del Registro de Contribuyentes) to inform the tax authority of (i) Legal domicile for notifications (ii) an e-mail address.   Failure to file this form within the time frame indicated will result in a fine pursuant to the tax law.   The regulations indicate that the obligation must be done 30 days after the corporation appears in the RUT system. However for this first time the Department of Revenue is setting up a calendar based upon the identification (cedula juridica) number for the corporation as follows:

a) Id numbers that end in l & 2:  30 days after the law comes into effect.

b) Id numbers that end in 3&4: Month 2 after the law comes into effect.

c) Id numbers that end in 5&6: Month 3 after the law comes into effect.

d) Id numbers that end in 7&8: Month 4 after the law comes into effect.

e) Id numbers that end in 9&10: Month 5 after the law comes into effect.

f)Id numbers that end in 11&12: Month 6 after the law comes into effect.

If I form a new corporation what happens ?

For new corporations that are formed in the National Registry it shall be the obligation of the corporation once formed to register and pay the pro-rated corporation tax within 30 days after the corporation is registered.

How much do I have to pay ?

Please refer to my video which details the amounts that will be due under the corporation tax:

https://costaricalaw.com/costa-rica-legal-topics/taxes-in-costa-rica/video-new-corporation-tax-law/

What happens if I don’t pay ?

The Department of Revenue will create a public database of corporations that are delinquent in the payment of the tax.   After 3 consecutive years of non-payment the corporation will be administratively dissolved and stricken from the corporation registry.  However, the liability will not disappear the department of revenue could pursue collection against the legal representative of the company.

Can I resign from a Corporation ?

Yes.   The law allows the representatives of the corporation to resign from the corporation.   The regulations however have included a condition that indicates that in order to resign the corporation must be up to date in all past due corporation fees.   As such the window that the law left to allow the resignation and thus avoid liability appears to have been closed by the regulations.

The full text of the regulations are set forth in the following link:  Regulations Corporation TaxLaw

 

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