As many of our readers may recall, even before the new tax bill was submitted to the Costa Rican Congress, a little tiny tax bill was also submitted for approval: The New Flat Corporation’s Tax.

It might be tiny when it comes to the amount of text in the law, but the not the rate: a flat yearly payment of US$200, which should be paid by all the active and inactive corporations.

Since most of the lawmakers in charge of deciding if this bill should be discussed have agreed to allow the bill to go to the Congress be voted on, there is now a good chance that this bill will become law.

If passed, this new tax will require every single registered corporation – it is estimated that in Costa Rica there are 486,000 registered corporations – regardless of its equity structure (S.A., S.R.L, I.E.R.L., etc) to pay a flat amount of US$200 per year even if the corporation has no business activity whatsoever.

To rent or buy this one hour video with Costa Rica Tax Expert Randall Zamora, please visit our Video On Demand page here.

This means that all the corporations used to hold a title of a car, boat, house, lot or just a dormant corporation which is not doing any business at all in Costa Rica must pay this new tax.

The only corporations which are not liable for this tax are those which are duly registered at the Ministry of Economy and the Tax Administration as fully active in business corporations and which meet the requirements of the so called Micro and Small Size Business, which includes a sworn statement, copy of the last income tax return filed and of course showing business activity; certification of registration at the Costa Rican Social Security System, copy of the Workers Compensation Insurance, etc.

Based on this news, this might be a good time to double check how many corporations you have and, decide if you really want to keep them all so you don’t have to pay a lot in taxes for companies that you are not really using.

We will try to keep you informed.

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.