Annual Taxes and Filing Requirements in Costa Rica

One of the few constants in life is taxes and fees. No matter where in the world you may live, there is a price to pay. Thankfully, here in Costa Rica it is a very small price to pay.

Desktop with a laptop, calculator and money representing tax preparation

Let’s start with annual taxes.

Each year all property owners must pay their property tax. Costa Rica property tax is a quarter of 1% (.25%) and is based on the registered value of the property. The value is registered with the local municipality and the national registry. For example if you have a property valued at $100,000 US dollars, the property tax will be only $250.00 per year, plus garbage and parks tax. Depending on the municipality it could be roughly another $100.00 per year. The end of the first quarter is March 31.

Keep in mind the Luxury Property tax when paying your property taxes. The luxury property tax applies to houses, condominiums, and apartments with a construction value beyond ¢133,000,000.00 (approximately US$ 214,500). The tax rate can be anywhere between 0.25% and 0.55%, depending on the declared value of your property’s construction. This tax is in addition to the annual property tax of 0.25%. This equates to roughly $250 to $500 per $100,000 of your declared property value. Need more info? Check out one of my previous blogs (https://blog.costarican-american-connection.com/luxury-home-tax/)

For those who have corporations there is also an annual tax. The government charges an annual fee that must be paid to keep the corporation in good standing. The fee is approximately $120 for non-active corporations that are used only as holding companies for real estate or any assest. The annual fee for active corporations is based on income and is typically between $200 and $380. According to law 9428, the tax must be paid by January 31 each year. The company’s legal representative is responsible to declare and pay the tax. If you don’t know if the taxes are current or overdue, you can consult the National Registry database (www.rnpdigital.com) or contact your property manager or attorney that helped you purchase the property.

Corporations must also pay the The Education and Culture Stamp Tax (Timbre de Educacion y Cultura). This tax is based upon the amount of the capital stock of your corporation. Most corporations in Costa Rica have a capital stock of less than 250,000 colones which means those corporations will only pay a tax of 750 Colones or about $1.50 USD. The payments are due by March 31st of each year.

Marchamo is the annual road circulation tax and mandatory liability tax. You can pay marchamo starting Nov. 15th and you have until Dec. 31st. To find out how much you owe ​​Text message to 1467 with the word marchamo, followed by the license plate number. You will not be able to renew or pay a marchamo unless you can show proof that the vehicle has an up to date inspection slip showing that the vehicle has passed its yearly emissions testing.

Below are the annual required filings for those who own corporations.

For IN-ACTIVE corporations, this year you need to file a one-time declaration with the Costa Rica Tax Authority for 2021-2022 informing the Tax Authority if it has assets and if so, the value of the investment/asset. This is for the Tax Authority to understand the present value and to avoid an increase put upon your corporation by the Tax Authority without true justification. As an example, your property is registered as an IN-ACTIVE (meaning you do not collect income from it) this filing needs to be done with an accountant indicating that the corporation has an asset and the value of that asset. THE NEW DEADLINE IS April 30, 2023.

A new law enacted in September 2019 requires Costa Rican corporations to disclose the identity of their shareholders or owners every year. ​​The corporation’s legal representative must file annually in April with the Registry of Transparency and Final Beneficiaries of the Central Bank. The filing includes details about the corporation and the name, address, identification number, and contact information of each shareholder or owner and their percentage of ownership. To file, the representative must first obtain a digital signature card from an authorized bank. Such cards are only issued to Costa Rican citizens and residents. A non-resident who owns a corporation can comply with the reporting requirements by granting a power of attorney to a third party who will then obtain the digital signature and file the disclosure.

If you have any additional questions or need any further clarification please feel free to contact me.