LEGAL SERVICES THAT MAKE THE DIFFERENCE

Tax Collection and tax law in Costa Rica

he tax legislation of Costa Rica is focused on the collection of taxes, and extraordinary efforts are being pursued as the Government of the Republic is constantly seeking additional sources of income.

Tax laws should not be taken lightly, as this causes extensive litigations with the Government requiring the legal advice of specialist tax lawyers. Mainly, the litigations occur because of the income tax.

Arturo Blanco Law provides solid legal advice in Tax Law, for those looking for tax counsel (tax doubts) or must face a litigation related to the payment of taxes in Costa Rica: Individuals, Costa Rican and foreign companies, and all types of financial institutions.

Our experts in litigation combine their expertise with tax and business laws to provide efficient and timely solutions.

What is the income tax?

ccording to the Ministerio de Hacienda (Tax Office), the income tax is the one that collects taxes on profits generated by any income generating activity or business, made by individuals or  legal corporations (local or foreign) in the country during the fiscal year.

Hacienda clarifies that the ordinary fiscal period of the tax begins each October 1 and ends on September 30 of the following year.

Why tax advice is so important?

rturo Blanco, a lawyer with over 25 years of experience, explains how over time the tax law of Costa Rica has been hardened to improve tax collection.

“Erroneously people still believe that the taxation of today is the taxation of 10 or 15 years ago, i.e., Government officials usually unprepared, overworked and with investigations that merely reviewed the additions of the taxes fillings. This has changed and the regulation has been tightened: Today, before visiting the subject of an audit, the official already knows the board of directors in which this person serves, has investigated the relation between companies and the existence of apparent economic interest  groups they belong to, etc.”,  says Blanco who has a specialization in taxes (Technology Foundation of Costa Rica – FUNDATEC) as well as a Masters from the University of International Cooperation.

“The Government official”, adds Blanco, “will have very specific questions to the taxpayer, this means that it will not go “fishing” to find something, because already has extensive knowledge about its businesses: the official knows that there is a relationship between company A and company B, and a joint economic interest, which generates a tax payment”.

The tax legislation of Costa Rica is constantly updated -practically every month- by means of decrees or regulations that fixes leaks and improves tax collection.

Specialist tax lawyers

The tax practice of Arturo Blanco Law is integrated within the firm’s corporate offices, located in Curridabat, San Jose.

Additionally the firm uses the services of experienced accountant firms, which provide extra advice on tax litigations, although we generally work directly with the accountant of the client, who knows its finances and provides the necessary information. 

The tax issue must be a priority for each person and business, to avoid disputes with the Government that, at least, can take up to three years to be resolved.