Understanding Business Compliance in Costa Rica: Key Legal Obligations

In Costa Rica, it’s crucial for companies to adhere to specific legal obligations and responsibilities to ensure compliance and maintain their good standing. Timely compliance is essential to avoid penalties and ensure the company’s operational integrity.

Key Legal Requirements for Business Corporations:

1. Corporate Tax Obligations:

•  In Costa Rica, corporations operate as separate legal entities and are subject to corporate taxation. This includes both active and inactive entities, such as Sociedad Anónima (Corporations) or Sociedad de Responsabilidad Limitada (Limited Liability Companies).
•  Annual corporate taxes are mandatory for all legal entities, with amounts varying based on the entity’s operational status. Payment is due within the first 30 days of the calendar year. Failure to comply for three consecutive years may lead to dissolution.

2. Annual Asset and Capital Declaration:

• Inactive corporations are required to declare their assets annually, utilizing forms D140 and D135, as mandated by resolution DGT-R-075-2019.

3. Register of Transparency and Final Beneficiaries:

• To align with OECD standards for tax and financial transparency, companies must annually disclose their final beneficiaries. This aids in combating tax evasion, fraud, money laundering, and terrorism financing.

4. Annual Shareholder Meeting:

• Both active and inactive companies must conduct an annual general meeting to discuss financial outcomes and adhere to legal formalities, ensuring the validity of any approved agreements.

5. Custody of Legal Books:

• Legal books, crucial for various corporate actions, should be securely stored within the country, typically in attorney custody, to comply with transparency and beneficiary registration requirements.

6. Law No. 9643 – Music Education System Tax:

• A specific tax, based on net capital, supports the national music education system. This tax is due annually in February and March, with rates outlined in Law No. 9643.

7. Value Added Tax (VAT):

• A 13% VAT applies to goods and services, replacing the previous sales tax. Payment is due by the 15th of each month.

8. Annual Business Patent Declaration:

• Businesses must submit an annual declaration for commercial patents by January 15, with provisions for delayed filings in special circumstances.

9. Informative Declaration D151:

• This annual summary statement on customers, suppliers, and specific expenses is informative and must be filed by February 28 to avoid penalties.

10. Income Tax:

• Active corporations are subject to income tax on their earnings, as regulated by Law No. 7092. This tax is distinct from the corporate annual tax and is based on net taxable income.