Costa Rica Expertise LLC

By Garland M. Baker
Special to A.M. Costa Rica

December and Christmas in Costa Rica is the prelude to tourism season and better weather, but this also is the time of the year to file certain crucial tax forms.

Everyone knows that life has two certainties: death and taxes. There is another: The national tax authority’s Web site stinks. It stunk last year, the year before that and the year before that. This year it is fancier with new graphics, new links, and a new search engine. They have obviously spent some money on revamping the interface much like the Instituto Costarricence de Turismo with its $880,000 site. However, it still does not work properly.

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Many links go nowhere, and the search engine is a joke. A search lists orderly results but a click on them ends in this error “The page you are looking for is currently unavailable. The Web site might be experiencing technical difficulties, or you may need to adjust your browser settings.”

It is frustrating enough to have to find which bank is selling tax forms, what bank has what forms, and what bank is not selling forms because they are fighting with the tax authority, referred to as the Dirección General de Tributación also known as Tributacion Directa for short. Yes, it is true, Banco Nacional, the country’s most important governmental bank will not take money to collect sales taxes for Tributación, and other banks will not accept Banco Nacional checks for tax payments.

At the Web site, explanations and details for more complex matters simply are impossible to get. The Web site requires a lengthy registration process to make simple requests, such as to download the ministry's most recent bulletin. Curiously, nowhere on the home page of the ministry do tax deadlines appear.

The absurdity about all of this is the current government wants to approve a new tax law for $500 million in new taxes when it cannot collect the taxes due. Just blocks from the main Tributación building, there are businesses that ask purchasers whether they want to pay sales tax. It appears in Costa Rica that it is optional to pay sales taxes because many businesses ask customers “Do you want an invoice? If you do, we will have to add sales tax and the purchase will cost you 13 percent more.”

How much money is lost in Costa Rica each day because of this common practice? Probably much more than the amount lost because many legal professionals do not use real values in property transactions to save on transfer taxes.

Only the Movimiento Libertario, headed by Otto Guevarra, is opposed to the new tax package currently in front of the legislature. The party argues that every government for the last 30 years has approved a new tax plan with the promise it will be the last and the one that will solve the country’s problems. The Libertarian party advocates diligently collecting taxes owed, promoting ease of payment and removing the current mountain of obstacles that exist.

Here are the most important filings for most readers up to the end of the year:

Nov. 30 Form D.151, Sales and Purchases Summary, is due. This is where businesses list the major payments and purchases they have made during the year.

Dec. 15 is the deadline for the annual income tax form, D.101v2.

All vehicles need a new marchamo (wheel tax) sticker on their windshields by Dec. 31.

All individuals inscribed with Tributación as working are required to file a personal tax return. All companies registered as active are required to file. Companies registered as inactive as those that only exist to hold property do not have to file a return, but it is a good idea to do so. Form D.101 version 2 is used for individuals and companies alike. The form is due on or before Dec. 15 which falls on a Thursday this year. A company is any legal entity registered at the Registro Nacional doing business as an S.A., sociedad anónima, or S.R.L, sociedad responsabilidad limitada.

Paying taxes is important for Costa Rica. Please do so even though it may be very frustrating and hard to do.

Garland M. Baker has been a resident of Costa Rica since 1972 and is now a naturalized citizen. He provides multidisciplinary professional services to the international community. Lic. Allan Garro provides the legal review. Reach them at [email protected] Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica. Copyright 2005, use without permission prohibited.

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