There have been several positive legal and tax changes in the past month that are important to expats and Ticos alike. Three warrant special mention: The new rules for online board meetings, the changes to the fines for not filing the RTBF for 2019, and the introduction of TRAVI by Hacienda (the tax department). The acronym stands for tramites virtuales or virtual procedures. [Read more…]
“Round and round it goes, where it stops, nobody knows.”
Does that quote refer to a roulette table or to Costa Rica’s tax Law 9635? Apparently, to the latter. The country’s decision-makers cannot make up their minds whether or not companies that are not active will have to file income tax returns on the due date Dec. 16.
The law passed the legislature Dec. 3 and was valid Dec. 4. However, it had no bylaws, the nitty-gritty regulations and rules that make a law work in practice.
Most expats now should know everyone with a Costa Rican company of any type will be required to file an income tax return this year. What many do not know is that they will have to submit two within three months of each other.
According to attorney Marco Retana, there is a fine of around $375 (depending on the exchange rate) for not filing. More importantly, non-filers will not be able to get any legal documents at the national registry for their company if they are not in compliance with the law. [Read more…]
Costa Rica along with other Central and South American countries now requires the use of electronic invoices. These are called facturas electronicas in Spanish, the buzzword everyone is talking about. The government wants everyone to use them by the end of the year. There are a few exceptions but not many.
Health professionals, accountants, and lawyers were the first required to use the new system starting in January, February, and March. These groups are the most significant tax cheaters, according to tax department studies. Each month that goes by includes another business type.
The concept behind electronic invoicing comes from e-billing used by corporations and trading partners for many years throughout the world. The term describes any method by which invoices are presented electronically to customers for payment. Countries like Costa Rica have elected to bastardize the concept to collect more taxes. [Read more…]