On September first, 2017, once again the tax on corporations, imposes a new Law of tax on Costa Rican corporationsentered into force; a tax that is not new, because between 2012 and 2015 (until the declaration of unconstitutionality of the law), a similar tax existed.
The collection of the tax applies to all types of Costa Rican corporations (sociedades anónimas, limited liability, collective, etc.) For this 2017, such charge will be partial, equivalent to the months from September to December. Also, as mentioned in a previous article, the collection of the new tax will be estimated, considering the gross income that each company.

• Inactive corporations will be charged a 15% of the base salary of an administrative assistant of the Judicial Branch, according to the established salary every year.
• Active corporations with an annual income below ₡51,144,000 will have to pay 25% of the base salary mentioned above.
• Corporations that report an income between ₡51,144,000 and ₡119,000,000 per year, will pay 30% of the base salary before said;
• And finally, corporations that have an annual income higher than ₡119,000,000 must pay 50% of the base salary of an administrative assistant of the Judicial Branch.
It is important to emphasize that the base salary of a judicial assistant for the year 2017 is ₡426,200.00 (around US $750). Failure to pay this tax on the established dates (during the first month of each year) carries an annual fine of 11.73% of the total tax.

Period established to bring up to date the tax payment

The new Law the tax on corporations includes transitory articles that allow delinquent corporations to catch up with the payment of taxes that were not paid with the previous Law.
Transitory II establishes that companies that are in arrears of the tax of the previous law (years 2012 to 2015), will have three months, from the past first of September, to pay the tax without having to pay interest or fines.
If the company does not pay the debt during that period, interest and penalties will be reactivated, which implies that the Registry will not grant certifications of any type, the corporation cannot participate in public offers for the provision of services, won’t be able to carry out transfers of assets, among others.

Exemption in the payment of transfer taxes

According to transitory III, for a period of 12 months from last September 1st, the transfer of real estate and movable property carried out by companies that have been inactive for at least 24 months prior to the validity of the Law, before the tax Authority, will be exempt from the transfer tax, payment of stamps and registration fees;.
If a company fails to pay for three consecutive periods, such default will give ground for the dissolution of the corporation, and both the representatives and the shareholders shall be jointly liable for the tax debt, which shall have preferential mortgage and pledge on the assets of the Company.

Small and medium-size companies registered as such before the Ministry of Economy, and small and medium agricultural producers registered in the Ministry of Agriculture and Livestock, are exempt from the tax. It is important to add that the tax will be now administered by the National Taxation Office and not by the National Registry.

ERP Lawyers & Associates: legal advice on corporate matters

If you require legal advice in the corporate area, ERP Lawyers & Associates offers you an interdisciplinary team of lawyers with extensive experience in this field. Contact us and receive personalized legal advice.