On December 20, 2019, the Tax Administration of Costa Rica published Resolution DGT-R-075-2019, which details the Registry Inactive Corporations before the Tax Administration.

Inactive Corporations must declare Income Tax.

This obligation arises because Law No. 9635 “Strengthening of Public Finances”, approved by the Congress on December 3rd, 2018, in Article 2, subsection a, obligates all legal persons, regardless of whether they carry out lucrative activities or not, to realize the declaration of the Income Tax.

In a nutshell, the Law obliges inactive corporations to declare income, in accordance with what is published by the Ministry of Finance on its web portal, which will imply that the declaration is filled in at zero.

In the first place, all those owners of inactive corporations; that is, those companies that do not have any type of activity and that only have assets, must be registered in the Single Tax Registry (RUT), of the General Directorate of Taxation, with the economic activity code 960113 “legal persons constituted in the country that do not develop economic activity of a Costa Rican source ”, and indicate the data of its legal representative and updated fiscal address.

Subsequently, the registered inactive corporations must declare their assets, liabilities and share capital, annually, within the same period that the active corporations file their income tax declaration, within two months and 15 calendar days following the end of the fiscal period, being now the fiscal period the same as the calendar year.

In order for the registration process to be carried out in a simple manner, the Treasury established a schedule according to the last number of the legal ID.

These are the steps to follow for the Registry Inactive Corporations:

1. Verify the month that corresponds to the registration, according to the established schedule, based on the number of completion of the respective legal documents:

– 1 and 2: January 2020

– 3 and 4: February 2020

– 5 and 6: March 2020

– 7 and 8: April 2020

– 9 and 0: May 2020

2. Enroll in the Single Tax Registry, through the digital platform called Virtual Tax Administration (ATV), available on the website www.hacienda.go.cr, through the Modification of Taxpayer Registry Data D.140 form, with the updated legal representative and tax address information, and the economic activity code.

3. Declare, once a year, the balance sheet of said company through the Patrimonial Declaration for Inactive Corporations, through Form D.135 available to those interested in the Virtual Tax Administration system. The deadline for submitting the first D-135 declaration will expire on March 15, 2021.

At the time of the declaration, the assets must be validated, verifying the assets registered in the public property registry, the bank accounts and financial investments must also be verified.

On the other hand, regarding the liabilities, the situation of each credit operation must be detailed, with information such as the amount, term, balance and details of periodic payments, among others. Likewise, the share capital must be duly established in the corresponding book of minutes, since it will be the support that proves the veracity of the capital in accordance with the information provided in the Public Registry.

It is important to carry out a prior review to correct and document the information of each company, in order to avoid future conflicts, since the information provided will serve as input for different supervision and control processes carried out by the Tax Administration.

The deadline for submitting the declaration of assets for the first time will begin on January 1, 2021 and will last until March 15 of that same year. The omission of the declaration of Inactive Corporations may result in a fine equivalent to half base salary (currently ¢ 225,100) for each month or fraction of the month, up to a maximum of three base salaries (currently ¢ 1,350,600).
But also remember, that the Single Tax Registry (RUT) should be done this 2020 and according to the termination of the legal ID of your company.

At ERP Lawyers we have a team of professionals in commercial and corporate law willing to provide in the Registry Inactive Corporations the and advice and support required to your company, both employers and their workers.