Things you need to know about your Costa Rican Corp. compliance

Legal Compliance: Things you should know for your company in Costa Rica

Is my Costa Rican Corporation up to date with its obligations? That is a question that foreign investors and entrepreneurs with businesses in Costa Rica must often ask themselves.

Thinking about our clients who also have that doubt, today we share with you 3 factors that you should consider to prevent any legal breach in the country and protect your assets.

Yearly company taxes, (in addition to any income tax or capital gain tax if the company produces them). This tax must be paid in January every year.

Submit a yearly Ultimate Beneficiaries ownership report (UBO) or also known here as “Registro de Transparencia y beneficiarios finales (RTBF). This report must be submitted in April every year and the fines for not doing so are high, so, it is important to comply with it ASAP if you have not done so already.

If your company is not actively running any business activity and therefore is not obligated to pay Income tax, then the company is obligated to submit an assets report every year also known as report for inactive companies. This one corresponds to the form D-195. The fine for not submitting may be very high, so it is important to do it ASAP.

The obligation to submit the report started in 2020, but the Tax Administration was unable to have the system ready until 2023. Therefore, in 2023 the companies were obligated to submit the reports for 2020, 2021 and 2022.

And, in April 2024, they will be obligated to submit the report for 2023. An accountant is the right person to submit this report, since its accuracy is important to avoid future unfair taxes. 

So, remember that Escrow Co. has an independent Accounting Dpt. which submit such reports for you.

Other obligations related to the payment of taxes that you should consider

In the past, there was no need for an inactive company to register itself with the tax administration. However, since they must now submit the D-195 every year, the Tax Administration is requiring your company to be registered with them and keep your contact and company information updated.

This process is made only one time using the form D-140. You must do it once. In the future, if there are changes in the company address, contact information, etc., another form must be submitted.

And if you dissolve or liquidate your company this form must be submitted to unregister the company in their databases.  This step must be completed to be able to submit the D-195.

Those are the major issues to keep the company in good standing. Of course, and depending on future events, there may be more issues…

For instance: if you sell the property there will be capital gains tax to pay, or if you have a new ID, or the company changes the name or the headquarters address, etc., you must update the info in the National Registry and the Tax Administration (Form D-140).

So, contact us if you need more info and professional advice that helps you avoid problems in the future and allows your company to function in the best way in Costa Rica. It will be a pleasure to accompany you throughout the entire process.

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