Corporate Entity Tax Law – 9024

Costa Rica: Corporation Tax No Longer in Effect
Reprinted from CentralAmericaData.com website.

Thursday, January 29, 2015
A ruling by the Constitutional Court has declared the tax on corporations illegal, starting from 2016, but companies must pay for the fiscal year 2015, which ends of on January 31.
From a statement issued by the Constitutional Chamber of Costa Rica

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A new ruling set back the corporation tax into effect in 2017. Please read our news post here.

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Doing Business
Written by Russ Martin
Friday, 10 February 2012 09:02
Reprinted from the CR LAW Limitada website.


Corporate EntitiesTax Law Nº 9024 goes into effect on April 1st, 2012.  People owning corporations in Costa Rica that don’t have economic activity may wish to take one or more of the following steps to reduce their tax liability:

  • Merge the clean companies with different real estate assets under one Holding company.
  • Merge business companies with liability exposure under one Operating company.
  • Dissolve “exposed” companies prior to 1 APR 12 when the Law enters force.
  • Resign to companies to which you don’t relate nor correspond, by sending notarized letter by certified/manifested mail.
  • An official clearance letter is needed, from social security CCSS, that the company bound for dissolution is clear.
  • Companies owing and/or registered under the CR Revenue Income Tax Index, must pay / deregister prior to dissolution.

CORPORATE ENTITIES TAX LAW (Google translator version).
Law No. 9024 of December 23, 2011
Published in Supplement No. 111-A La Gaceta No. 249 of December 27, 2011

THE LEGISLATURE OF THE REPUBLIC OF COSTA RICA DECREES:
TAX ON CORPORATIONS

Article 1. – Creation
Hereby established a tax on all corporations, as well as a branch of a foreign company or its representative and individual limited liability companies that are registered or which may hereafter be entered in the National Register.

Article 2. – Incurrence and chargeable
The event for all commercial companies, branches of foreign companies or their representative and individual limited liability companies that are registered on the National Register occurs on 1 January each year.

The event for all commercial companies, branches of foreign companies or their representative and individual limited liability companies to register in the future will be presented to the National Register.

For purposes of this Act, the fiscal period shall be one year from 1 January to 31 December of that year.

The chargeable event for commercial companies, branches of foreign companies or their representative and limited liability companies registered individual, the first of January each year and for which constitute and register during the fiscal period, the time of submission of the memorandum to the National Register. In the latter case, they must pay the fee established in subsection a) of Article 3 of this act, in proportion to the time remaining between the date of filing of the deed with the Register referred to the end of the fiscal period.

On this tax does not apply the discount provided for in Article 3 of Law No. ° 4564, Tariff Act of the Public Register of April 29, 1970, as amended.

Article 3. – Rate
Annually pay a fee as follows:

a) Commercial companies, branch of a foreign company or its representative and individual limited liability companies that are active against the tax authority, shall pay an amount equal to fifty percent (50%) of monthly base salary, according to the Article 2 of Law No. ° 7337, May 5, 1993.

b) Commercial companies, branch of a foreign company or its representative and individual limited liability companies that do business and are inactive against the tax authority, shall pay an amount equal to twenty five percent (25%) of base salary monthly, under Article 2 of Law No. 7337, May 5, 1993.3

Article 4. – Forms and payment deadline
In the case of corporations, sole proprietorships with limited liability, as well as a branch of a foreign company or its representative, registered on the National Register, the tax is paid directly by the forms, means, manner and conditions established for this purpose by the National Registry, within the first thirty calendar days after January 1st of each year.

Commercial partnerships, sole proprietorships with limited liability, including branches of a foreign company or its representative during the registration process fiscal period of the tax created by this Act, shall pay tax at the time of submission for registration in the National Register along with other taxes, stamp duties.

Legal representatives of corporations, limited liability companies and individual branches of a foreign company or its representative, shall be jointly liable with it for non-payment of tax imposed by this law.

Article 5. – Penalties and fines
Failure to comply with its obligations under this law shall apply the provisions contained in Title Ill of the Law No. 4755, Code of Regulations and Procedures Tax, on May 3, 1971, as amended, including the reduction of penalties provided for in article 88.

The National Registry can not issue legal certificates or any documents to register for the tax payers who are not current on your payment. To this end, the officials responsible for registration of documents will be required to consult the database to the effect that will raise the National Register, and shall cancel the presentation documents of defaulters. Similarly, the tax payers who are delinquent may not contract with the State or any public institution autonomous and semiautonomous.

The National Register will create a database searchable by electronic means for the public to verify whether taxpayers are up to date.

Shall apply to commercial companies and sole proprietorships with limited liability in their capacity as taxpayers of this tax, the provisions of Article 122 of Law No. 4755, Code of Regulations and Procedures Tax, on May 3, 1971, and amended.

Article 6. – Winding up and cancellation of registration
Failure to pay the tax in this Act for three consecutive terms shall be grounds for dissolution of the corporation, limited liability company or individual branch of a foreign company or its representative. The National Registry will send a notice of dissolution to the Official Gazette, in accordance with Article 207 of the Commercial Code, and shall cancel the registration and recording of goods.

Debts arising from this tax form legal mortgage or pledge Preferred Preferred, respectively, in the case of real or personal property owned by corporations, limited liability individual enterprises or branches of a foreign company or its representante.4

Article 7. – No tax deductibility
The tax established in this law shall be considered non-deductible expense for purposes of determining the income tax.

Article 8. – Exemption
Exonerated from paying this tax to taxpayers who are undertaking productive activities permanent, classified as micro and small enterprises and registered as such in the register maintained by the Ministry of Economy, Industry and Commerce (MEIC), and duly registered as contributors to the Directorate General of Taxation, the Ministry of Finance, the time of the event for the tribute.

Article 9. – Administration
The Ministry of Justice and Peace, through the National Registry, administration, supervision and collection of this tax.

Article 10. – Use of resources collected
To facilitate monitoring of the proper administration of this tax, the Finance Ministry must create an account within the budget of income classifier for the source of funding, in order to identify the proceeds of this tax, also in the draft national budget must be clearly identified by the corresponding classifier, subheadings spending financed with the tax, in accordance with the following article of this law. Funds raised by this concept by cash or treasuries authorized assistants will move daily to the National Treasury in order to be administered under the cash basis only.

Article 11. – To tax
The proceeds of the collection of this tax will go to fund the following items:

a) A five percent (5%) of total revenue from this tax will be allocated to the Ministry of Justice and Peace to finance the proper administration, management, supervision and collection of tax by the National Registry and to support the financing of the Directorate General of Social Rehabilitation.

b) Ninety-five percent (95%) of total revenue from this tax will be allocated to the Ministry of Public Security to be invested in programs of public safety and fighting crime.

Article 12. – Offences and penalties for fraud or negligence
Without prejudice to any civil or criminal liability in such event, is punishable by a fine of ten to fifteen times their total monthly remuneration and removal from office applicable in the case of the fine higher than the official or officials or civil servants by intent or gross negligence have not fulfilled their obligations to each appropriate in this ley.5

Article 13. – Presentation of report
The Ministry of Public Security shall submit semi-annually to the Special Permanent Commission for the Control of Public Expenditure and Income of the Legislative Assembly a report detailing the costs and investments made with funds from this tax. Also present a projection of expenses and investments to make in the next semester.

Article 14. – Reform of the Law No. ° 7764
Are reformed Article 129 of Law No. ° 7764, Notary Code of April 17, 1998. The text is as follows:

“Article 129. – Competition material
Notaries public may handle the liquidation of corporations when the solution was by unanimous agreement of the partners, intestate and testamentary succession, adoption, locations of undivided interests in properties with the cadastral map, information of perpetual memory, divisions of common things, materially or by public sale, distribution, price, demarcation and boundary marking and payment appropriations of money.
The handling of such matters before a notary shall be optional and may only be brought to the knowledge of these officials when not included as stakeholders minors or incompetents. ”

Transient I:
The tax must meet legal persons registered at the National Registry for the period between the date of enactment of this Act and December 31 of that year, was canceled on a proportional basis within thirty calendar days following its entry into force.

Transient II.
Commercial companies, subsidiaries of foreign companies or their representatives and the individual limited liability companies are dissolved within three months from the entry into force of this law will not pay this tax. After this period without completing the process of dissolution, the taxpayer must pay the tax as provided in this law.

Transient III.
The National Register shall deliver to the interested party who so requests a list of commercial companies, branches of foreign companies and sole proprietorships with limited liability which is listed as legal representative.

Transient IV.
For the purposes of this Act, and within twenty-four months from its effective date, the legal representatives of commercial companies, branches of foreign companies and limited liability individual enterprises wishing to resign may do so by written notice to the registered head office. This notice shall subsequently protocolized and registered with the Register of Legal Persons of the National Register, in order that the waiver is effective. The applicant must demonstrate to the appropriate notary receiving the information at the registered office concerned or, failing that, the cause that prevented delivery efectiva.

Transient V. 
Since the enactment of this Act and within six months will be exempted from respective tax on the transfer and payment of stamp duty, registration, transfers of real and personal property are made of corporations that have been inactive before the tax authority for at least twenty-four months prior to the enactment of this law to other individuals and / or legal, the above only once.

Governs three calendar months after the first day of the month following publication.

LEGISLATURE. – Approved on the twenty day of December two thousand eleven.

THE EXECUTIVE communicate

Juan Carlos Mendoza Garcia

PRESIDENT

Jose Roberto Rodriguez Quesada Martín Contreras Alcides Monestel

FIRST SECOND SECRETARY SECRETARY

Since the presidency twenty-third day of December, two thousand eleven.

Executed and published

Laura Chinchilla Miranda. – The Minister of Finance, Fernando Herrero Acosta, and the Minister of Public Security, Mario Zamora Cordero.

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