In 2015 and after a long process of debating around the subject, Costa Rican Constitutional Court declared the cancellation of taxes on corporations or illegal the tax on corporations (by a majority and for reasons such as considering that the constitutional principles of taxable capacity and the principle of advertising were violated).

This ruling affected the Law of Taxes on Corporations No. 9024 valid from December 23th, 2011;  annulling Articles 1, 3 and 5, and which took effect starting on January 1^st, 2016.

Undoubtedly, an important decision regarding thousands of registered corporations in Costa Rica. However, it is equally important to understand how it affects corporations in the periods prior to this resolution.

Which corporations must pay the tax and which don´t with of cancellation of taxes on corporations

The cancellation of the tax on Corporations which started in January, benefits all companies registered starting January 2016,; but the ones recorded previously shall comply with the payment of the pending taxes while the law was in force.

For those who have not paid the tax corresponding to the year 2015 or previous years, are not exempt from it; all the regulations annulled remains in force until that period (the law remains valid for the periods 2012, 2013, 2014 and 2015).

The Constitutional Court said in 2013 that the National Registry would suspend the registration of any document from companies that have not paid its taxes, until the unconstitutionality regarding the tax was resolved.

Since the final resolution is now in force, the National Registry has published guidelines for documents that are in debt , its corresponding cancellations and the deadlines to do the payments of the taxes

Avoid any trouble with your “sociedades anónimas”

In other words, companies who have any delay in the payment of this tax are not exempt from it and other responsibilities. Those corporations are subject to fines, payment of overdue interest, cancellation or filing of any documents submitted to the National Registry, and other possible actions.

In Costa Rica there are over 600 thousand registered companies, and the Contraloría General de la República has observed high levels of tax debts just for the period 2015. The CGR has even asked to start the process of charging the due taxes and even the cancellation of the registration for companieswho are in debt.

Therefore, it is extremely important for those who own or represent those corporations that, if they have any delay payments related to these periods, proceed with the corresponding payment in order to avoid any contingency.

The interdisciplinary team of  ERP Lawyers & Associates has the means and knowledge to help you in all the procedures related to Corporations in Costa Rica.

We invite you to contact us or visit our website to review information concerning this topic.

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