Exclusive to A.M. Costa Rica

There have been more new tax rules in the last four years than there have been in the past 10. Many expats are lost in the maze, and their heads are about to burst with all the information. Here is a concise list of the deadlines past and present to help everyone get organized.

Jan 31. Law 9428 taxes were due. Most people refer to these assessments as the yearly company taxes. In Spanish, they are called, “Impuesto a las Personas Jurídicas.” It is not an income tax, but just a charge by the government for using a company structure to hold assets instead of in a personal name. Active companies pay 25% of Costa Rica’s minimum salary or 112,500 colons ($200), and inactive entities pay 15% or 67,530 colons ($120). Currently, the base salary in the country is 450,200 colons or around $800. For those that have not paid, interest is now accruing, and they should get the amount due paid as soon as possible to avoid the overcharges.

March 16. Income tax returns are due for any company doing business that was activated after July 1, 2019. It is important to note this is for active companies only and does not apply to inactive ones. [Read more…]

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…]