New Corporate Tax
Beginning today, September 1, 2017, the new Corporate Tax Law is in full force. This law imposes a new tax which is similar to one previously in place. It also requires the reporting of corporate information to the tax authorities. This tax is payable annually on all Costa Rican corporations. The law establishes new tax rates depending on whether a corporate is ‘active’ or ‘inactive.’
Active corporation’s tax rate is calculated as a percentage of their annual income. The bracket is established based on a percentage of the wages of a clerk and runs around $250.00 yearly. The amount of tax for 2017 will be prorated to cover only September to December of this year.
Inactive corporation’s 2017 tax is USD $45.00, or 21,310 colons. While the exact amount of tax inactive corporations will have to pay in 2018 is yet to be determined, it is estimated to be approximately USD $160.00, or 85,472 colons.
This tax must be paid before DECEMBER 31st 2017
Of additional concern for those non-residents who hold substantial interest in a Costa Rican Corporation, is the additional requirement to file Form D-140, Declaración de Modificación de Datos del Registro de Contribuyentes. This form must be filed personally or by a locally based, legal representative. If a corporation does not have a local agent with sufficient powers to act on behalf of the corporation), a Power of Attorney must be executed. The form provides current corporate ownership information, including: the full name and ID of the corporation’s legal representative, address and contact information, exact domicile of the corporation, economic activity. This form also serves to update contact information for process service.
The filing due dates are determined by the last digit of the corporation ID number:
a) Corporations with ID ending in 1 or 2, file in October 2017;
b) Corporations with ID ending in 3 or 4, file in November 2017;
c) Corporations with ID ending in 5 or 6, file in December 2017;
d) Corporations with ID ending in 7 or 8, file in January 2018; and
e) Corporations with ID ending in 9 or 0, file in February 2018.
There are substantial penalties for failing to file Form D140 in accordance with the law. The monthly penalty can range from USD $390.00 to as much as USD $2333.00 per month.
If you haven’t already done so, we strongly suggest that all our clients contact us and discuss this matter. We can provide additional information, clarify your filing status, and, if necessary, take steps to ensure you fulfill all the requirements of this new law.