Costa Rica

Taxable period

The fiscal period matches the calendar year, but there are special cases in which the taxpayer may request the approval of a fiscal period different than the calendar year.

Tax returns

The general rule is that all companies must file the tax return two and a half months after its fiscal closing.

The tax system is one of self-assessment with occasional audits by the Tax Administration.

Payment of tax

Taxpayers are required to make partial payments on account of income tax in each fiscal period, in accordance with the following general rules:

• The basis for calculating instalments is the tax determined in the immediately preceding year, or the arithmetic average of the last three fiscal periods, whichever is greater. In the case of taxpayers who, for any reason, have not declared in the three previous fiscal periods, the basis for calculating the partial payment quotas will be determined using the declarations that they have submitted and, if it is the first, by a well-founded estimate that they must provide to the Tax Administration.
• 75% of the amount of the determined payment on account must be divided into three equal instalments, which must be paid successively no later than the last business day of the months of June, September, and December of each year (considering that the recently modified ordinary fiscal period is equal to the calendar year from January 1 to December 31).
• From the total tax that is paid when submitting the affidavit, the instalments corresponding to that fiscal period must be deducted. The resulting balance must be paid within two months and 15 calendar days following the end of the respective fiscal period.

Tax audit process

For a tax audit to begin, it is necessary that the Tax Administration send a notification to the taxpayer to be audited. The taxpayer is selected according to one of the selection criteria previously established, and this should be indicated in the communication at the beginning of the tax audit. The Tax Administration must start the audit within two months of the communication to the taxpayer.

Once the audit is completed, the auditors hold a meeting with the company and invite them to correct the issues found.

If the company does not accept the correction, it can start the described procedure and pay the respective tax until that procedure has finished along with the corresponding interest.

Statute of limitations

The action of the Tax Administration to determine a tax liability will be under the statute of limitations of four years. The same term is valid to demand the payment of the tax and its interests.

The aforementioned term is extended to ten years for taxpayers non-registered with the Tax Administration, those that are registered but have filed returns qualified as fraudulent, or those that have failed to file the tax return.

The term of the statute of limitations should be counted as of the first day of the month following the date when the tax should be paid.

Topics of focus for tax authorities

Important topics for tax audits are transfer pricing, sales tax credits, gross margin on sales, employee benefits, and income tax.