Companies Delinquent with Taxes Will Be Dissolved in Costa Rica

Overview of the Government Announcement

At the beginning of 2019, the Revenue Service of the Ministry of Finance (Ministerio de Hacienda) announced that it would request the Public Registry to dissolve 74,185 corporations that failed to pay the corporate tax for three consecutive periods.

Collectively, these corporations owe more than ¢10,600,000,000 (approximately USD $17.5 million) to the Costa Rican tax authority.

Legal Basis for Corporate Dissolution

The dissolution process is executed pursuant to Article 7 of Law No. 9428, Law on Legal Persons Tax, published in Digital Scope No. 64 of La Gaceta No. 58, dated March 22, 2017.

This legislation authorizes the tax authority to seek the dissolution of corporations that fail to comply with the legal obligation to pay the annual corporate tax over three consecutive periods.

How Companies Can Avoid Dissolution

Corporations interested in preventing dissolution must pay all three delinquent periods as soon as possible. Payment can be completed through:

• The online platforms of authorized banking institutions with agreements with the Revenue Service, or

• Direct payment at any bank, by providing the corporation’s legal identification number.

Prompt compliance is essential, as once the dissolution process is formally initiated, reversal becomes significantly more complex.

How to Verify Delinquent Corporations

Individuals wishing to verify whether a corporation is delinquent may:

• Visit the official website www.hacienda.go.cr, under the section “Legal Entities”, highlighted in the notices banner; or

• Use the “Situación tributaria” (tax status) tool by entering the corporation’s legal identification number.

These public tools allow interested parties to confirm outstanding tax obligations.

Role of the Public Registry and La Gaceta

Once the Revenue Service communicates the list of corporations delinquent for three consecutive periods to the Public Registry, the following steps occur:

Publication of Dissolution Notice

The Public Registry publishes a notice of dissolution in the official government newspaper La Gaceta, in accordance with Article 207 of Law No. 3284, Commercial Code.

Cancellation of Corporate Registration

Following publication, the Public Registry proceeds to:

• Cancel the corporate registration, and

• Cancel the registration of assets held under the corporation’s name.

Liability Does Not End with Dissolution

Corporate dissolution does not extinguish the tax debt.

The Revenue Service retains full authority to:

• Continue collection procedures, and

• Pursue collection against the last officially registered shareholders, who are deemed jointly and severally liable for the unpaid corporate taxes.

This liability survives the cancellation of the corporation’s legal existence.

Scope of the Corporate Tax Obligation

For fiscal year 2019, a total of 337,107 corporations were required to comply with the corporate tax obligation.

As of February 18, 2019, the Revenue Service had collected approximately ¢44,983 million, corresponding to the three fiscal periods during which the tax had been in effect.

Allocation of Collected Funds

The funds collected through the corporate tax are allocated to several public institutions, including:

• The Ministry of Public Security, for police infrastructure, equipment, citizen security initiatives, and crime prevention;

• The Ministry of Justice and Peace, specifically for the General Directorate of Social Adaptation; and

• The Judicial Branch, to support the Judicial Investigation Agency in combating organized crime.

Key Takeaway for Corporate Owners

Costa Rican corporations must remain vigilant regarding their corporate tax obligations. Failure to pay the legal persons tax for three consecutive periods exposes the company to mandatory dissolution, cancellation of assets, and continued personal liability for shareholders—even after the corporation ceases to exist.

Feel free to reach us with your questions or comments.