Today marks the end of the fiscal year in Costa Rica. Most corporations and individuals adopt the traditional fiscal year and pay income taxes Dec. 15. However, individuals and firms also can request a special year based on individual circumstances from the Dirección General de Tributación
As A.M. Costa Rica pointed out Sept. 20, today also is the last day to pay an estimated advance amount on 2010-2011 income tax.
Francisco Villalobos, the nation’s chief tax collector, has been adamant that those who do not pay this advanced amount will face fines and penalties. A lot of accountants do not agree with him, but unless expats want to make legal history, they probably should pay the tax.
This will not be easy. First individuals and corporations are on the hook for the greater amount of the average of the last three years taxes paid or the amount of last year’s tax. The Ministerio de Hacienda Web site gives a good explanation but only in Spanish.
The money can be paid at a local bank with one of two forms: D-108 “Autoliquidación de pagos parciales impuesto sobre la renta” or D-110 “Recibo Oficial de pago.” Naturally the amount paid is deducted from the total tax for the year when the final form is paid.
Taxpayers are supposed to make this payment three times a year, but the rule has been enforced lightly.
Villalobos, who has been on the job since late last year, is being aggressive in collecting this type of tax now.
Expats who are in business also should know that they have until Nov. 30 to report major income and expenses to Tributación on form D-151. That process also is explained on the Tributación Web site.
Generally expats have to report total sales to a single customer if they amount to more than 2.5 million colons during the year.
They also have to report payments to a single vendor that reach this amount.
But for professionals, rents, commissions or interest the base amount is just 50,000 colons, less than $100 and probably less than one extended medical visit.
Employees at Tributación put these numbers together based on the cédula number of the company or individual and create a cross-match of expenses and payments. That way they can see who understates income for tax purposes.
A lot of landlords are surprised when a Tributación worker contacts them during the coming year because most property owners do not expect expats to file such a form.