Corporations in Costa Rica: Get to Know the Percentages for the Payment of Taxes Defined by Law
The new law 9428 that establishes the new taxes on corporations is already into force. This law defines the tax amounts that the corporations must pay per year.
With this new law, the percentages of collection change; with the previous version there were only two types of fees: 25% of the montly base salary of a clerk for the inactive corporations and 50% of the monthly base salary for active corporations. Payments are now defined according to the activity of the corporation and the income it receives, as shown in the following chart:
Activity of the Corporation Tax and Fee percentage
Without economic activity (inactive before IRS Institution): 15% (˘63.930)
With economic activity but without income: 15% (˘63.930)
With economic activity and with a gross income lower than ˘50.880.000: 25% (˘106.550)
With economic activity and with a gross income between ˘50.880.000 and ˘118.720.000: 30% (˘127.860)
With economic activity and with a gross income over ˘118.720.000: 50% (˘213.100)
For the purposes of this new law, the period of payment of said tax (fiscal period) is between January 1st and December 31st of each year, and must be paid, without penalty, within January of every year.
Likewise, this new law grants to the delinquent corporations a grace period of three months from the entry into force, to pay their taxes without the payment Interests or fines that had been imposed. And, to inactive companies, the new law grants a period of twelve months to transfer their assets without the payment of transferable taxes and the payment of stamps and registration fees.
Many of the corporations in Costa Rica are set up for serving as holdings; therefore, with the entry into force of this new law, there are some considerations that should be taken into consideration:
•If you have an inactive corporation and you believe that the tax could become an economic burden, you should assess whether it is better to dissolve it and remove the assets it owns to avoid possible contingencies for the not payment of the taxes.
•If your corporation is active or for some reason you cannot quit to it, you shall keep on time in relation to its taxes to avoid being persecuted for the payment and that the corporation can’t carry out activities because of its delinquency.
If you still have doubts about this matter or don’t know how to proceed, please get advice from lawyers experienced in corporate and business law in Costa Rica.
AUTHOR: ERP Lawyers
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.