The new annual Corporation Tax Law (Ley de Impuesto a las Personas Jurídicas) # 9428 has been approved and published in the Official Newspaper La Gaceta. Therefore, you will have to pay Corporation Tax 2017.
Some information in this article is not up to date anymore. For up to date information (made on 2/22/2018) go to the November 2017 Update Corporation tax and form D140.
The regulations to the law have also been posted on the website of the Costa Rica Department of Revenue in the Spanish language.
When is the Tax due?
The corporation tax is due by January 30th of every year. For 2017 the amount will be prorated. It is expected that the Department of the Treasury will start collecting the tax between July and August 2017.
Learn all about the November 2017 New Update Corporation tax and form D140 here.
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How much is the Corporation Tax 2017?
The way the Corporation Tax 2017 is calculated this time, is based upon a percentage of the base salary of a government employee. For 2017 that base salary is 426,200 Colones. [Update June – You will only have to pay September – December 2017]
The law distinguishes between “active” from “inactive” companies under the following payment schedule:
• An inactive company will pay 15% of the base salary which at current exchange rates is approximately US$115. [426,200 x .15% = 63,930 (US$115)]
• An active company with a Gross income of less than $91,675 will pay 25% of the base salary which is $192.
For active companies, the sliding scale of the Corporation Tax 2017 continues to go to 30% of the base salary for companies that have Gross wages between $91,675 and $213,909 and up to 50% if the company has Gross wages in excess of $213,909.
Active or Inactive Corporation
How do I know if my Company is active or not?
You can check on the website – http://22.214.171.124/consultasic/index.aspx – (copy/paste this link into your browser) of the Ministry of the Treasury known as the Taxpayer Identification System (Sistema de Identificación de Contribuyentes SIC). There, you can enter your corporation identification number (cedula jurídica) to determine if your company appears as active or not in the Treasury database. Also, you can try with the name of the corporation.
What if my company appears as active when it should be inactive?
When a company is active, at some point the company was included in the Treasury database as being obligated to file an Income Tax Return (Impuesto Renta) or a Sales Tax Return (Impuesto Ventas).
Is it possible a company has been erroneously included in the database as active? Then you will need to hire an accountant to assist you in filing the deregistration form (Formulario de desincripción en el Registro único tributario) in the Treasury Department.
Previous years due?
What if you owe the corporation tax for previous years?
The previous corporation tax law was in effect for 2012-2015. In 2016 there was no obligation to pay corporation tax. If you did not pay the corporation tax for 2012-2015 and you want to continue to use the corporation you will have to pay the back taxes to do so.
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You need to pay attention to the transitory provisions of the Law.
The Corporation tax law is allowing the taxpayer the following grace periods.
1. Waiver of fines and interest on the past due corporation taxes. This waiver is effective for 3 months from the date the law comes into effect. [Update June – Pay before September 30, 2017, and you will not be charged any interest. There will be interest charged starting October 2017]
2. If you want to transfer property or vehicles out of a corporation into your personal name or another corporation you can do so and be exempt from the property transfer taxes. This is in effect for 1 year. Does the title need to be clear to do so? Not necessarily unless the mortgage or vehicle lien has some sort of prohibition in the document that would not allow transfer without the consent of the creditor. Contact your attorney to find out if you can or not.
3. A board member can resign if removal from the board or management of a corporation is requested. This resignation must be recorded in the National Registry. All officers, directors, manager, auditors have 2 years to file the resignations. [Update June – you can resign from September 2017 until August 2019]
For more information on the new Corporation Tax 2017 watch the video below or contact your lawyer.
Attorney Roger Petersen specializes in Costa Rica real estate and is a partner of Petersen & Philps, law offices in Escazu. The firm practices in Costa Rica in different areas such as
- Real Estate Purchase and Development,
- Commercial Transactions,
- Corporate Incorporation,
- Intellectual Property,
- Employment Law,
- Estate Planning,
- and Business Transactions.
Mr. Petersen is also the author of the well-known book “The Legal Guide to Costa Rica”. His website Costa Rica Law has a lot of useful legal information. Contact him at (506) 2288-2189 Ext. 101 or firstname.lastname@example.org
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