There is good news for expats struggling with the education and cultural tax. This pesky tax is levied each year on corporate entities and is due March 31. But March 31 this year was a Saturday, so the tax is payable without penalty today.
That may be easier said than done because there seems to be a lot of confusion at banks about what is required. Expats reported that the bank tellers refused their paper D-110 form. One expat reported that the bank teller gave him a computer disk containing the Ministerio de Hacienda’s EDDI program to electronically file taxes. The expat said he does not speak Spanish well and the program was too complex.
The ministry’s Dirección General de Tributación said Friday that paper forms are valid as is online payments. An email response from Sammy Segura Saborio of that agency said that Tributación still is accepting the paper form via local banks. The form costs 120 colons, and some have reported difficulty in finding one.
Segura said in response to an accountant, copied to A.M. Costa Rica, that the responsible parties of corporations can make payments at a bank even without the form. And the EDDI system is capable of producing a valid form. Segura also said that the amount may be paid online at a number of banks if an expat has an account.
Despite the explanation, finding a way to pay online has proved difficult for some expats. The tellers’ confusion stems from the decision by Tributación to eliminate paper forms for monthly sales tax reports and for the annual income tax report. Banks have declined to accept the paper forms for these transactions since the end of last year.
The EDDI system imprints a readable bar code at the top of the form that identifies the contributor.
The education and cultural tax, itself, tops out at 9,000 colons (about $18) for corporations with a net capital of 2 million colons or greater. That’s about $4,000 at the current exchange rate. An inactive corporation that has few assets pays just 750 colons or about $1.50.
Legislators did not choose to eliminate this tax when they drafted a complex package of taxes that is awaiting passage. The proposed law sets up a 14 percent value added tax and extends taxes to services, commercial and some residential rents and contract services.