After the Costa Rica Tax Reform, Law for the Strengthen of Public Finances, a new taxpayer concept for income tax purposes was included in the Income Tax Law, considering as taxpayers all legally incorporated entities in Costa Rica, regardless of whether they perform or not any economic activities, including professional activity entities, government-owned companies, collective entities without legal representation and participation accounts existing in Costa Rica. After this amendment.
As a result of this inclusion, all legal entities are now considered taxpayers for income tax purposes, regardless if they were considered inactive entities in the past.
On December 20th, 2019, the new obligations for inactive companies were published by the Tax Administration, and starting this month (January 2020), these obligations include:
1. Registration obligation: Inactive entities must get registered before the Tax Registry of the Tax Administration.
2. Tax return filing obligation: These entities must make an annual filing detailing all their assets, liabilities and equity, using a new tax form, pending to be issued.
New obligations for these entities will include, not only the obligation to timely submit their declarations, but also to keep their accounting entries and records up-to-date. Adequate accounting will be the basis for the preparation of the annual tax returns and must be available to the Tax Administration when required within 10 business days.
DV Business Solutions is always up-to-date and ready to provide timely legal and tax advice and assistance to our clients. If you have any doubts or questions with respect to these obligations, or any other issues that may affect your business, do not hesitate to contact us.
Daniel Araya
Socio / Partner
Vladimir Blanco
Socio / Partner