Tax agency changes the rules on reporting purchases

The tax people want to know how Costa Ricans are spending their money.

A new rule by the tax-collecting agency says that companies, individuals and even public agencies have to report their purchases down to the last colon. In the past, taxpayers only had to report purchases that totaled 2.5 million colons or more each year from a single source.

The new rule also requires taxpayers to report rental payments, commissions paid, interest and professional service expenses regardless of the amount. In the past, the threshold was 50,000 colons for each source.

The new rule was issued by Carlos Vargas Durán, the head of the Dirección General de Tributación, an agency of the Ministerio de Hacienda. Like most agency edicts, this one earned a brief mention on the official Web page and was reported in detail in the Oct. 19 La Gaceta official newspaper.

The rule affects anyone who pays income tax in Costa Rica, including foreigners. The agency makes a provision for foreigners who may not be residents but who still owe taxes. These individuals would not have the DIMEX card and the corresponding number issued to legal residents by the immigration agency. The tax department will issue a special number to these individuals.

The information sought is basically the same as the deductions that individuals and businesses would use to compute their tax returns.

The rule is so new several professionals in the business of preparing tax returns had not heard of it Tuesday.

The edict applies to the 2011-2012 tax year that ended Sept. 30. Normally taxpayers would have to make their reports of income and expenses by Nov. 30. They would use Form D-151, called
Declaración anual resumen de clientes, proveedores y gastos específicos.

Taxpayers still do not have to report all their income in detail. The department is maintaining the rule that only income of 2.5 million colons from a single source during the tax year need to be reported. That threshold does not apply to professional services, like income to physicians, dentists and lawyers. They have to report income from a single source of 50,000 colons or more.

Of course the income of salaried workers is available to tax inspectors form the Caja Costarricense de Seguro Social to which employers make monthly reports.

Because the rule is new, most taxpayers will not have to file the D-151 form until February, said the La Gaceta posting. The exact date depends on the type of taxpayer. Large firms have until March 8. As with most tax forms now, reporting is done by computer and a special agency program.

This system was created so that tax investigators could crosscheck payments to and payments from individuals and corporations. Each type of purchase or payment has a unique code.

The paragraph that establishes this rule is a bit ambiguous. It says, according to an A.M. Costa Rica translation and paraphrase:

On the other hand, when deductions correspond to purchases from vendors and specific expenses for rents, commissions, professional services and interest, they should be reported when realized from the same person at the national level independent of the amount.

Generally the tax department requires a factura or official receipt to document each expense.

However, expenditures made to individuals or firms outside Costa Rica can be documents with whatever is provided and still can count as deductions.

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