New corporate tax to start
From the print edition
On April 1, people possessing corporations in Costa Rica will have to start making decisions about their assets and possibly their businesses. The new law will impose a yearly fee on both active and inactive corporations. An inactive corporation is one that does not earn profit, commonly used in Costa Rica to hold assets, while an active corporation is registered with the Tax Administration and earns income.
The new fee is based on the salary of a level-one administrative assistant at the Legislative Assembly, which for 2012 is $702. An active corporation will have to pay 50 percent of that base salary, or $351, while an inactive corporation will pay 25 percent, or $176.
Payment is due in January for the preceding calendar year, but for the first year only 75 percent of these amounts will need to be paid, because the law takes affect in April.
To avoid paying the tax on a corporation for 2012, such as an inactive one that does not hold any assets, the corporation must be cancelled before July 1. Lawyers are charging roughly $150 to process cancellations.
Corporation holders also have until Oct. 1 to transfer any assets out of their corporations to themselves as individuals or to other corporations to avoid paying the transfer taxes. For help, contact tax specialist Jorge Granados at 2288-2201.
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