That is a change from the current practice if not the current law. The deadline is a step towards quarterly deadlines in the next fiscal year.
Taxpayers have to deposit this tax advance based on either the last year’s tax or the average of the past three years, according to Francisco Villalobos Brenes, director general of the Dirección General de Tributación, the nation’s tax collector.
The taxpayer can choose the lower of the two amounts, he said.
The advance payment does not relieve the taxpayer from filing the annual form by Dec. 15 and paying the amount remaining, if any. Next year, taxpayers will have to file an estimated payment every three months. But the deadline to file the form still will be Dec. 15.
Villalobos has been on the job less than a year and has been taking his responsibility seriously. He was the man who cracked down on soccer players who did not file and pay the luxury home tax.
There have been some other major changes that are important to expats who earn money and pay taxes in Costa Rica.
Villalobos said he realizes that his agency has to provide more information to the English speakers. Expats are sometimes blindsided by changes in the tax rules.
That happened Aug. 15 when banks declined to accept the usual three-part forms on which retailers report the monthly sales tax. Tributación changed the rules, but this was not well known in the expat community. Now the monthly report has to be filled out using the agency’s EDDI-7 system. Eventually the form will be sent to Tributación electronically and payment of any tax will be made through a bank, probably online.
This is the system that the Caja Costarricense de Seguro Social now uses.
Villalobos said that help and PC computers are available for taxpayers at the agency’s offices. He said he thought the system was working well because Sept. 15 there were only 292 persons still trying to file their sale tax returns on agency computers by 2 p.m. that day all over the country.
Taxpayers will be filing their annual income tax form electronically in December if the agency’s current plans come to pass.
Villalobos got the job, in part, because he frequently wrote a newspaper column that was sometimes critical of the state of taxes in Costa Rica.
He has a lot to be critical about. He said in an interview Monday that tax evasion ranged from 33 percent to 80 percent, depending on the tax and the taxpayer. The bulk of his efforts has been directed at reducing this evasion. One method was a lottery for persons making purchases with credit cards. The first winner, a Bancrédito card holder named Olga María Jiménez Brenes, has just been announced. The idea is that sales tax evasion is much harder if the sales are run through the bank credit card system.
Villalobos also is promoting enforcement. Monday he said that over the last three years banks paid out 14 trillion colons in fees to lawyers and appraisers. That’s about $28 million. He said his agency would soon check into the records of the 287 recipients of these funds to make sure they declared the income.
He also has introduced a plan whereby the top 1,000 taxpayers, primarily companies, will have to submit financial statements audited by an outside accountant. He said Tributación has the right to require this because it has the right to view company books.
But Villalobos uses the term books in the abstract because he just issued a resolution that said electronic books would be accepted by his agency. In the past, companies had to fill out hardcover financial books by hand. He said he based his resolution on the law that created digital signatures. The law also gave full recognition to digital material as it does to the older paper documents. That also means that tax inspectors will have to look at the financial operation instead of just finding fault with the technicalities of the written books, said Villalobos.
Villalobos also is instituting an email system where taxpayers can get answers. That address is firstname.lastname@example.org. However, questions about a specific company or individual taxpayer have to be accompanied by a digital signature and other documentation. The service is available seven days a week and 24 hours a day.
It was Villalobos’ agency that swooped down on local restaurants last week and closed some due to irregularities in their taxes.
Another project is to establish a list of profit margins by type of business, for example, a shoe store. If a taxpayer’s firm deviates dramatically from the traditional percentages of its industry, Villalobos said a tax audit is likely.
“If you are going to lie to me, don’t lie too much,” he said.