If you own a Corporation you need to know about these new Costa Rica corporate tax urgent changes for 2017-2018. In order to keep you informed and assist maintaining your companies and/or corporations in compliance with all Costa Rican Laws please review the information indicated below:
Costa Rica Corporate Tax:
In accordance with the Legal Entities Corporate Tax Act (Law No. 9428) that came into effect this past September 1st, the corporate tax has been reinstated with new rates to be applied. This new corporate tax is due every January and the amount of the tax that has to be paid depends on the status of your corporation/company with the Costa Rican Taxes Authorities. In spite of this, the tax rate for this particular year, will be only a portion of the corresponding amount, in accordance with the rates established in the law and detailed hereunder. This, considering the corporate tax became applicable only for the remaining four months of this year 2017.
The deadline to pay this tax in a timely manner for this year only is October 2nd, 2017. Upon January 1st, 2018 the tax fee will have to be paid in full and the deadline to pay the tax will be the next thirty calendar days upon the 1st of each January.
Please bear in mind that penalties and liabilities will apply to all corporations/companies that do not comply with this obligation, which is extended severally to legal representatives and could even imply confiscation of the entities’ assets. If the tax is not paid for 3 consecutive years, the company may be automatically dissolved and its assets (if any) liquidated or foreclosed.
The tax rates stipulated by this Law are:
The minimum wage in Costa Rica for this 2017 is ₡426,200.00 (approx. USD$774.00).
In addition to the above mentioned, the regulations to the Law No. 9428 establish that companies/corporations registered in the National Registry prior this Law becoming into effect, that are not yet registered before the Costa Rican Taxes Authorities, must do so through filing a D-140 Form, in accordance with the schedule below following the last digit of their identification number:
- Entities which their last digit of their identification is 1 or 2: October 2017
- Entities which their last digit of their identification is 3 or 4: November 2017
- Entities which their last digit of their identification is 5 or 6: December 2017
- Entities which their last digit of their identification is 7 or 8: January 2018
- Entities which their last digit of their identification is 9 or 0: February 2018
OTHER IMPORTANT ELEMENTS STIPULATED IN THE COSTA RICA LAW NUMBER 9428.
Some of the most important aspects of this new law are:
- The payment of this corporate tax is not a expense deductible from the income tax.
- A Transitory Provision according to which, and for the next 12 months only, any transfer of real estate or vehicle, boat, plane, etc. from a corporation/company to a third party, shall be exempt of the applicable transfer tax (1.5% of the price or registered value), and payment of legal stamps and recording fees (approximately 0.8% of the price or registered value). However, as a requirement for this tax exemption to apply is that the transferring entity must appear as being an inactive or dormant before Taxes Authorities for at least the previous 24 months to the entry into force of the law.
- For the next 24 months upon the law becoming enforceable, officers, comptrollers, and managers of corporations and/or companies may resign to their positions through written communication delivered in the registered domicile of the corporation/company and subsequently notarize such letter to be submitted at the National Register for recording purposes.
Should you have any questions or require our assistance for any of these matters please do not hesitate to contact us at your convenience.