Responsibilities of Inactive Corporations
In recent months, the Costa Rican Tax Administration (Ministerio de Hacienda) has implemented various mechanisms in order to detect and control the legitimization of capital and to root out illicit enrichment through commercial companies in
In recent months, the Costa Rican Tax Administration (Ministerio de Hacienda) has implemented various mechanisms in order to detect and control the legitimization of capital and to root out illicit enrichment through commercial companies in Costa Rica.
It is necessary to establish a difference between each company since the obligations may vary depending on the different types of company. In this case, we will focus on Inactive Corporations, that is, those that do not carry out economic activity. Below we will cover each of the obligations that must be met.
Obligations for Inactive Corporations:
- Payment of Corporate Taxes.
This is a tax that must be paid by all commercial companies registered in the Registry of Legal Persons of the National Registry. The amount to be paid will be calculated considering the current base salary for each period, the base salary amount for the fiscal period of 2020 is ¢ 450,200.00.
The percentage of payment that is required of each company depends on various requirements, however, for this specific case, if it is an inactive company, you must pay 15% of the base salary. In short, the sum of ¢ 67,530.00.
Payment must be made within thirty calendar days after January 1 of each year, without interest or fines, and may be made in person or through the digital platforms of the collecting entities: Bac San José, Banco de Costa Rica, Banco BCT, Davivienda, Banco Nacional, Banco Desyfin, Banco Lafise, Scotiabank, Scotiabank Transformándose, Promérica, Banco Improsa, Banco Cathay, Banco General, Banco Prival, Teledólar, Grupo Mutual Alajuela, Cruz Roja Costarricense, Tiendas Ekono, Servimás, and BN Servicios.
- Registry of Transparency and Final Beneficiaries.
This is a declaration that must be submitted each year and was created in order to comply with international recommendations regarding tax and financial transparency. Its objective is to obtain updated information on shareholders, information on the totality of their participation, and mainly to identify the final beneficiary of each mercantile company.
For 2020, the declaration must be completed between the 1st and the 30th of September. In order to do this, the legal representative of the company must access the website of the computer system developed by the Central Bank of Costa Rica called Central Direct with the digital signature, and you must insert the information of the shareholders with a view in the Legal Books of your company and the valid identity documents of each participant (passport / dimex / ID / other).
- Yearly Declaration of Assets and Capital.
In December 2019, the revenue services (Ministerio de Hacienda) issued two new regulations which modified the definition of “taxpayer” as described in Section 2 of the new Tax Law issued in December of 2018 (Law 9635 to Support the Government Finances).
Previously, only active corporations were considered taxpayers and were, therefore, required to file for income taxes. The modification now requires that all inactive corporations file for income taxes as well. Inactive corporations are the ones with no business activities.
It is common knowledge that many people use inactive corporations to hold assets such as real estate or vehicles. In these cases, even if the company is not engaged in any business activity, it may still produce expenses such as property taxes, HOA fees, and car maintenance and insurance, just name a few examples.
The two new obligations are as follows:
1- File an Affidavit for Information
The filing of form D-140 is required, which provides information such as: the name of the officers of the corporation (or managers) and the street address.
The Revenue Service provided a schedule establishing the dates for when this form must be filed. The schedule is based on the last digit of the ID number of the corporation (or cédula jurídica).
The form should have been submitted from January to May of this year 2020. There is no need to resend it next year. You only have to present it again if you must update your identification number, if you must change the company representative or if you are going to notify for the first time that you no longer carry out commercial activities.
2- File an Affidavit for Assets
The other new requirement prompts corporations to file the form D-135 which contains information from the balance sheet of the company, which is the balance of the assets, liabilities and equities of the company. Basically, the government wants to know how many assets the company currently has. This form must be filed once a year between January 1st and March 15th.
Both these forms must be filed online through the Agencia Tributaria Fiscal or ATV (online tax portal). It is possible to create an account and have access online if you already have residency. People without residency are required to appear at a local office from the Revenue Service (Ministerio de Hacienda) to first register the online user and file the forms.
Please note that having the residency only does not automatically allow you to create the account online. The DIMEX number must have been updated in the certificate of good standing of your corporation which in turn is connected with the revenue service. If you have obtained residency, then you must confirm whether your DIMEX number has been included in the certificate of good standing of your corporation. Once you have taken care of that, then you can do the online registration with the ATV.
Having access to the ATV allows you on the one hand to file these forms online but also to file other forms such as the ones related to income taxes and VAT.
It is important to comply with all the obligations to avoid fines and future problems with your company. If you would like more information, please do not hesitate to contact our Business Team. Ask about our compliance plans for inactive companies and we will be happy to help you.