|
More
importantly,
non-filers will not be
able to get any legal
documents at the
national registry for
their company if they
are not in compliance
with the law.
/ A.M. Costa
Rica wire service
photo.
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How expats can prepare to file
tax returns
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By Garland M.
Baker
Special to A.M. Costa Rica
Most expats now should know
everyone with a Costa Rican
company of any type will be
required to file an income tax
return this year. What many do
not know is that they will
have to submit two within
three months of each other.
According to attorney Marco
Retana, there is a fine of
around $375 (depending on the
exchange rate) for not filing.
More importantly, non-filers
will not be able to get any
legal documents at the
national registry for their
company if they are not in
compliance with the law.
The first filing date is Dec.
16 for the fiscal period Oct.
1, 2018, to Sept. 30, 2019.
The second is March 16, 2020,
for the short period of Oct.
1, to Dec. 31, 2019.
The recently passed Law 9635
changed future fiscal periods
and made them the same as a
calendar year. This year is a
transition time and the reason
for two filings. Usually, tax
returns are due on Dec. 15,
but this year that date falls
on a Sunday, as does March 15
next year.
Almost all tax documents of
any type require online filing
nowadays. There are no more
paper returns except for some
penalties which are printed on
an online form and paid at a
bank.
To file a tax return with
Costa Rica’s tax department a
person with legal
representation must declare it
for the company because they
are personally responsible for
its accuracy.
To do so, the person needs an
account with the
Administración Tributaria
Virtual system (virtual tax
administration, known to
everyone as ATV). It is
straightforward if one has the
correct information.
Now the hard part. Most expats
do not have their company
up-to-date or do not qualify
to get an ATV account. Only
people with a Costa Rican
cédula (citizen I.D. card), a
DIMEX (residency I.D. card),
or a N.I.T.E. (a unique tax
number assigned by the tax
department) can register.
Here is a checklist for expats
to prepare for filing a tax
return:
1. Go to the Registro
Nacional’s website (Costa
Rica’s national registry) and
sign-up for an account and buy
a literal certification of the
company.
2. The Banco de Costa Rica,
Banco Nacional or any Costa
Rican post office can also
print the informational form
for a cost of around 3,000
colons.
3. Check the information about
the company. Is all the
identification data correct
and up-to-date? If not, one
needs to visit a Costa Rican
notary and correct it.
4. Is there someone in the
company with full
representation to conduct
legal affairs with a Costa
Rican citizen I.D. or a DIMEX?
If not, and the company’s
other information is correct,
the legal representative can
go to any Hacienda (the tax
department) office (located in
most big cities) and request a
N.I.T.E. number.
Once the above steps are
complete, and the responsible
persons have the correct
information they can sign-up
for an account with Costa
Rica’s ATV tax system. Here
are the steps to do so:
1. Go to this web address: https://www.hacienda.go.cr/ATV/Login.aspx.
2. Click on the text “Crear
cuenta de usuario” (create a
user account) left of the
“Ingresar” (enter) button.
3. The first question is “Tipo
de identificación” (type of
identification). There are
three options. “Cédula persona
fisica” (I.D. for Costa Rican
citizens), “Número de
Identificación Tributario
Especial” (the special tax
I.D. number referred to above
called a N.I.T.E), and lastly,
“Documento de Identificación
Migratorio para Extranjeros”
(this refers to a DIMEX I.D.
for residents).
4. Select the correct
identification with the
drop-down selector and fill in
the number in the box that
follows.
5. People with a cédula and a
DIMEX number will also need to
input their birth date and the
expiration date of the card
they carry. This data is a
crosscheck to avoid fraud.
6. Once all the correct
information is filled in,
click the “Aceptar” (accept)
button, and if everything
right, the system will next
display a temporary password
to log in and provide the user
with a page of token numbers.
Do not lose them, they are
important.
What are token numbers?
Tokens are like the captcha
boxes found on many websites.
They are used to distinguish a
human from a machine to thwart
spam and automated extraction
of data.
Hacienda refers to its token
system as TIV or “Tarjeta
Inteligente Virtual” (virtual
intelligence card). It has
three boxes, and each requires
the input of a letter and a
number from the token list
supplied during sign-up.
To summarize the details
above:
1. Everyone needs to file tax
returns for every type of
company in the future. It does
not matter if they are active
or inactive. The tax
department wants to get away
from that distinction.
Staffers there consider all
companies active. Many expats
and frequent visitors use
inactive companies to hold
property titles, motor
vehicles, boats and other
assets. In the past they have
not had to file returns for
the companies if there was no
economic activity.
2. Filing tax returns with the
tax department is not hard to
do, but a company’s legal
information needs to be
current. If it is not, an
attorney who is a notary must
bring it up-to-date.
3. Once a company’s data is
correct, only a person with a
Costa Rican citizenship I.D.,
DIMEX number or a N.I.T.E can
get an account;
4. It is easy to sign-up and
log into the tax department’s
system and fill out the forms
found there, including income
tax returns.
Can an accountant do this?
“Yes,” according to Kevin
Chavarria, a certified public
accountant, “but the legal
information must be correct,”
he said.
Now for the tricky part, what
to put on the tax form. Law
6935 is specific according to
Chavarria. “Inactive companies
do not have income. The
government wants to know the
value of all the assets held
for future taxes especially
capital gains taxation,” he
said.
Next month’s article on June 3
will discuss what to put on a
D-101, Costa Rica’s income tax
return for the many expats
holding assets using inactive
companies. There is still
plenty of time to learn how to
it and comply with Law 6935 to
avoid penalties.
Under the existing rules,
foreigners who own a Costa
Rican company must be
physically present in the
country to obtain a N.I.T.E.
number. That could impose a
hardship on those who visit
the country infrequently as
tourists or similar yet still
have assets here.
Editor's note: Garland
M. Baker is a 47-year resident
and naturalized citizen of
Costa Rica. His team solves
problems for expats. Reach him
at info@crexpertise.net.
Baker has undertaken the
research leading to his
articles in conjunction with
A.M. Costa Rica. Find the
collection at CrExpertise.info.
A free reprint is available at
the end of each piece.
Copyright 2019, use without
permission prohibited.
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Have
you had problems
filling out an
income tax
return? We
would like to know your thoughts
on this story. Send your comments
to: news@amcostarica.com
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