WHAT TAXES DO I PAY, HOW AND WHERE DO I PAY THEM?

This advisory note covers taxes charged against Corporations, not business or personal taxes for those who are employed. Office locations are provided at the end.

If you buy a property and have it in a Corporation, you have three taxes to pay. If your lawyer says he / she has to pay these for you, and hence expects payment, that is incorrect. You can deal with them very easily and the systems are efficient.

1 The property tax to Pérez Zeledón Municipality – the tax paid for Municipal services, which is calculated on your property value.

1.1 This tax becomes payable at the beginning of the year and will be considered late, adding penalties and interest, if not paid before the end of March.
1.2 When you buy a property, you will have to do a Property Declaration with the Registro Nacional (The National Registry). This should be done just after closing your deal; check that your lawyer intends to do this and it is included in his / her fees.
1.3 Prior to the purchase, you should see the registered deed Estudio Registro, where the ‘Valor Fiscal’ (value) is identified. This is the national registration value. However, your taxes are determined at local Municipal (Pérez Zeledón) level.
1.4 You need to take your Property Declaration documentation to the Oficina de Valoracion y Castrato in San Isidro (see below) so your ownership, and hence tax liability, is entered in the PZ Municipal system. This office has two functions (a) to deal with property valuations and (b) to deal with matters relating to property boundaries / ‘planos’. So if you have any boundary problems or wish to check title and ownership issues, this is also the office to go to.
1.5 Note however, many valuations are out of date and the Government has instructed Municipalities to conduct re-evaluations to bring values up to proper levels and increase local tax income. Your first visit may therefore prompt the Municipality to conduct a review. Valuations are conducted using a standardized national manual on type of construction, size, facilities available, land type etc. If a revaluation is conducted, you will be given a copy of the document and be asked to sign your acceptance of this value, and the new tax assessment.
1.6 Once in the ‘system’, your property valuation becomes available to the Municipal office (next door), where taxes should be paid. Property taxes are currently 0.25% of the registered value (unless you own a ‘luxury’ home with a value over C117 million, in which case tax is calculated between .25% – .55% on a sliding scale).
1.7 When going to pay for the first time, take your Estudio Registro documentation, your ID / Passport and a Personeria Juridica if the property is owned by a Corporation. Thereafter you should only need to present the former year’s payment record.
1.8 Payment may be made by cash or credit card. Paying the year’s tax in a lump sum attracts a discount but quarterly payments can be made.

2 The Corporation Tax – a tax levied on Corporations was introduced by the Government in 2012 to gain additional income for enhanced security services in Costa Rica.   However, the tax was challenged as ‘unconstitutional’, withdrawn and then reintroduced under new law in 2017. The tax for a Non-Active Corporation is currently C64.650 per year and must be paid by 31 January, or penalties will be incurred.  If a Corporation is registered during the tax year, tax will be charged on a pro-rata basis for the remainder of that year.

2.1 This tax should be paid in the Bank of Costa Rica. Take your Personeria Juridica which will enable the Bank to access the register of Corporations, receive and record your payment. Note BCR will not accept payment by debit or credit card from other banks, payment will need to be made in cash.
2.2 Note however that a Personeria Juridica is only valid for three months (and only one month for banking ID purposes). To get a new one, go to the upper floor of the bank to the office marked ‘Registro Nacional Sede Regional’. There is a small desk in the corner marked ‘Timbres’ (stamps), pay for a new PJ, you will be issued with a payment certificate, take this to a service desk and a new Personeria Juridica will be issued.

3 The Education and Culture Tax – a small annual tax of C9.000 levied against all Corporations to gain additional income for education and cultural activities in Costa Rica.

3.1 This is a central Government tax, to be paid at the Administracion Tributaria de Zona Sur / Ministerio de Hacienda office. Payment should be made by 31 March, retroactive for the past year.
3.2 This office deals with all central Government taxation – business / sales taxes, personal employment income tax etc.
3.3 To pay the Education and Culture Tax, you have two options:

• • Go to the first floor of the Ministry office with your Corporation document / number. They will print the form / invoice which you pay at your bank, or
  • Ask your bank for form D110, make payment, a receipt will be issued and you need do no more. (Some banks do not hold D110 forms!)

3.4 If you do not pay this tax, it will become a debt against your Corporation. Therefore, if you wish to sell or close your Corporation, payment of the total accrued will become payable.
3.5 Most expat residents not running a business or working have ‘non-active’ Corporations. However, mistakes get made and you can suddenly find your Corporation is considered ‘active’. If you wish to check the status of your corporation, go to the ground floor office of the Ministerio de Hacienda where they can check your entry on the national register.

Office Locations:

Pérez Zeledón Municipality:

Standing in front of / with your back to the Cathedral, turn left and it’s the blue and white building on the left facing corner, opposite Delicias coffee shop. Walk straight ahead with the building on your left, see ramp to glass door – entrance to the tax office. Note there is a separate waiting area, and therefore a faster service, for ‘pensionados’!

Proceed two doors down to Oficina de Valoracion y Castrato

Administraction Tributaria de Zona Sur / Ministerio de Hacienda:

Standing in front of Cathedral, turn left and left again to next junction.  Turn right, proceed across next junction, pass Red Cross and Nexus hair salon on your right, Ministry is the next office building with metal frontage – just past left turn into weekly farmer’s market / feria.

 

Sheelagh Richards

 

(Amended May July 2018)