Once registered, corporations will be assigned a corporate identification number, which will identify the corporation in all its acts, known in local legislation as the “Cédula Jurídica” or Corporate Identification Number. This number will be issued by the online system upon registration. 4. Basic Tax Aspects Entities shall only pay taxes over income- generating activities located in Costa Rica. Corporate Tax rates shall apply. Before an entity begins any commercial operation, it shall be registered before the Tax Contributor Registry ( Registro de Contribuyentes ). Also, all inactive entities (not registered as income and/or sales taxpayers with the Tax Administration), must be registered before the Tax Authority as inactive and declare all its assets, liabilities, and capital stock. The income tax is regulated by the income tax law N° 7092 (“Ley del Impuesto sobre la renta”) and its regulation (“Reglamento a la Ley del Impuesto sobre la renta, Decreto Ejecutivo N° 18445- H”) Additionally, there was a tax reform called “Ley de Fortalecimiento a las Finanzas Públicas” N° 9635, which entered into force in July 2019; therefore, the income tax law must be read and analyzed in conjunction with the tax reform law. A tax is established on the profits of natural persons, legal entities, and collective entities without legal personality, domiciled in the country, who develop lucrative activities of Costa Rican sources. The taxable event of the income tax is the receipt or accrual of revenues in cash or in kind, continuous or occasional, from lucrative activities of a Costa Rican source, as well as any other income or benefit from a Costa Rican source excepted by law.

The tax period changed after the new tax reform entered into force on July 1st, 2019; now, the tax period is according to the calendar year (it starts January 1st and ends December

31st of every year). 4.1 Corporate Tax

The corporate tax shall be paid annually and on or before January 31 of each year. The amount paid is related to the gross income of the entity. For 2023, the amounts to be paid were: ● Inactive entity: 69,330.00 colones (USD $132 approximate) ● Active Entity income less than ¢55,464,000 colones: 115,550.00 colones (USD $218 approximate) ● Active Entity income between ¢55,464,000 colones and ¢129,416,000 colones: 138,660.00 (USD $263 approximate) ● Active Entity with income above ¢129,416,000 colones: 231,100.00 (USD $436 approximate) The Tax payment can be made in any of the banks of the Costa Rican Banking System and can be paid through Internet banking managed by any bank of preference. If the legal representatives or owners do not have Costa Rican bank account the payment can be arranged through a local contact (property manager, accountant and/or attorney). It is important to keep the receipt for your record. 4.2 Bookkeeping System All tax contributing entities are required to have a proper bookkeeping system. All tax contributing entities will have 3 accounting books known as “Diario”, “Mayor” and “Inventarios y Balances” . The accountants are in charge of keeping these books updated. Entities are not obligated to hire auditors or have an auditor in staff. This is a standard

ILN Corporate Group – Establishing a Business Entity Series

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