Exclusive to A.M. Costa Rica

Costa Rica’s tax department finally made up its mind about what do with inactive companies. Starting this year, all inactive entities will be required to file a tax return, Form D-135, due March 15, 2021, and yearly thereafter. It is a new tax return where assets, liabilities and equity must be reported using ATV, the Administración Tributaria Virtual, the country’s online digital tax system.

An inactive company is one that does not do business and only exists to hold assets or for other reasons other than producing revenue. The tax authority made up a new tax identifier for them, 960113. In the past, these types of companies were not required to file tax returns as other businesses do.

The government has been off and on regarding tax returns for these types of structures. Last May this writer said they were on, then reported in June they were off again. Now it appears they are on for good with their public notification regarding the new requirements in the official newspaper, La Gaceta, Dec. 20. [Read more…]

Exclusive to A.M. Costa Rica

The panic continues for those with a company, association, trust or other legal entity in Costa Rica that is required to file a shareholders and beneficial owners report with the Central Bank, as mandated by Law 9416.

Unbeknownst to most American expats, they have another problem, IRS Form 5471. In a month’s worth of interviews with many U.S. citizens who are owners of companies in Costa Rica, only three people could be found who file the required form. The U.S. fine for not doing so is $10,000 per instance.

For those late to the show, a summary of Law 9416 and how to file the information with the government can be found by reading, “Time to fess up or pay up!,” “How to register for Law 9416,” and “How to fill out transparency forms.” [Read more…]

Exclusive to A.M. Costa Rica

The Costa Rican government will require full disclosure starting next month of everyone’s secrets hidden in companies.

Unless the powers-that-be change their minds again, full registration of all legal entities in the country, as mandated by Law 9416, will begin on Sept. 1 and continue through the end of January.

The first deadline was March 1, six months ago, to start the process, but many business leaders complained loudly so the deadline was extended. There has been so much tax news this year, it is easy to get confused by all the information, so an update follows to refresh people’s memories. [Read more…]