On 8th August 2011, 38 of Costa Rica’s Law Makers voted for the Corporation’s new Tax Bill to become a law, which means that starting in January 2012, all the corporations registered in Costa Rica will have to file and pay this new tax.

President Laura Chinchilla claims that they will use this money to fight the growing insecurity problem in Costa Rica.

Who is liable for this tax?

All the so called Mercantile Entities duly registered in the Costa Rican Public Record Office, this includes all the Sociedades Anonimas (SA), Sociedades de Responsabilidad Limitada (SRL) and other less common type of corporations such as Empresas Individuales de Responsabilidad Limitada (EIRL) and Sociedades en Comandita (SEC) must pay this tax. Also, foreign companies with registered branches in Costa Rica will be liable for this tax.

What are the rates?

For active companies, which means corporations with ongoing business activities the amount to be paid is ¢158,100.00 (around $316) and for non-active, dormant corporations, for example the corporation that’s formed simply to own real estate and/or a car, will have to pay ¢79.050.00 (around US$158)

Are there any loopholes?

Well, there is only one way not to pay this tax and it is not really a loophole. The only corporations which won’t have to pay this tax are those which are registered at the Ministerio de Economia (Ministry of Economy) as PYMES or MICROPYMES.

These business are micro to small sized business, normally managed by the owner with no more than 10 employees. Of course you have to go through quite a bit of red tape to get registered as a PYME or MICROPYMES, and you must also be registered with the Caja Costarricense de Seguro Social, etc.

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

So, the bottom line is that the only way to not pay this tax is to be a fully registered small company doing business in Costa Rica.

My Two Cents/Colones

Since 1976 there has been a similar tax in Costa Rica: The Education and Culture Stamp tax, payable by all the registered corporations in Costa Rica, active or inactive, the purpose of this tax is to financially back up the public Colleges of Costa Rica, but the truth of the matter is that the Public Colleges of Costa Rica are having serious financial difficulties.

So once again Costa Rica’s lawmakers, President Laura Chinchilla and her not-so-wise team believe that they need to create taxes in order to try and fix every single one of the country’s problem…

This was what the previous administration of Oscar Arias tried to do with the Luxury Property Tax in an effort to fight poverty but, the problem is that they are just sitting there HOPING that we pay these taxes and not taking pro-active measures like reducing ambiguous expenses or going after companies and individuals who are not paying the taxes, the problems are not going to be solved by themselves.

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.