Based on the Article 99 of Costa Rica Tax Norms and Procedures and Decree Nº 28455-H, the Costa Rican Tax Office can, every year, pick and make a list of different lines of businesses that would be the audited and inspected.

The year 2007 is not going to be the exception to the rule, since last December 2006 the Tax Office already had its wish list for this year and it includes:

1. Vehicles and Parts importers and dealers.
2. Sale or Rent of Real Estate.
3. Educational Services.
4. Self Employed Professional such as lawyers, accountants, architects, doctors, etc, whether they perform the services individually or thru a corporation.
5. Tourism related services such as hotels, transportation, tourism operators, travel agencies, tours an entertaining.
6. All gambling related activities.
7. Any Corporation or individual that expenses represents 95% or more of the annual gross incomes.
8. Car Shops, including body work.
9. Any individual or corporation that regardless of the line of business has been approached by the Tax Office and as a result tax returns were filed or corrected.
10. Services related to financial brokerage and Money market.

The process is very simple: The Tax Office will pick corporations and individuals that match with any of the above listed profiles, then will show up in your office, give you a notification and request normally you will have up to ten working days to file all the requested information.

The Tax Office can go back as far as four years; If they find that the individual or corporation didn’t pay properly any type of tax or did not meet any of the Costa Rican regulation tax wise, then they will officially notify which one, how much and the fines, and in other circumstances such lack of legal invoices they could shut down your business.

If you fit into one of these categories would be better if you go a little bit back and double check your books and tax returns, and make sure that everything is in good shape, otherwise, this is the perfect time to grab the shoe box out of the closet and put all your numbers together, but make sure that a professional is looking over your shoulder, by doing that if a Tax Inspector knocks on your door you won’t have to worry at all.

Written by Randall Zamora who is the President and CEO of CostaRicaABC.com, former CFO and Head of Accounting Department of multinational companies like Four Seasons Resort Costa Rica, active member of the Interamerican Accounting Association, Pro Bono Local Partner of The World Bank and contributor to their yearly publication “Doing Business Report.”

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.