The country returns to normal today after a Semana Santa holiday, and normal means that there is a tax deadline.
This is the deadline for the so-called timbre de educación y cultura that is levied each year on every corporation or similar entity, including subsidiaries of foreign firms registered in Costa Rica.
The deadline usually is March 31 every year, but today is the next working day after the deadline, which fell on Sunday.
The Dirección General de Tributación, the tax collecting agency, has made little mention of the due date. That last notice published to the agency’s Web page was in April, and that appears to be incorrect in some aspects.
The agency said that the small annual tax could be made with a Form D-110 at the local bank branch. But most banks are declining to accept tax agency paperwork now that the EDDIE computer system is up and running. That means expats without the tax system installed on a computer will have to rely on accountants or bookkeepers to make the filing. Once the tax form is filed electronically, someone still needs to pay the tax at a bank.
Lawmakers passed the tax with a fixed amount in 1976. Since then the amount has been a victim of inflation. Firms with net capital 250,000 colons or less, that is about $500 or less, pay just 750 colons, probably less than the taxi fare to the bank. The largest firms with net capital of more than 2 million colons (about $4,000) are charged 9,000 colons.
The tax applies to any corporation owned by an expat whether the individual is here or outside the country. Plenty of expats have placed vehicles and homes in corporations for asset protection and are unaware of the tax. In fact, there are some expats who never have paid the tax on their corporation.
They will find that penalties are far greater than the tax itself, and they need to have their tax professional visit a Tributación office to straighten out the obligation.
The educational and cultural tax was not replaced by the new corporation tax of about 190,000 colons that it levied each January on active entities. Owners of inactive corporations pay half that, but all still pay the full rate for the education and cultural tax.