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An image from the Minister of Housing of Costa Rica entitled "Costa Rica Tax Obligations" with a map of Costa Rica

As a real property and/or CR corporation owner in Costa Rica, you should be aware about the various taxes that need to be paid yearly.  Failure to pay them would generate penalties and lead to a collection process.

 

LUXURY TAX

Due date: January 15th, 2018

The Solidarity Tax for the Strengthening of Housing Programmes (Impuesto Solidario para el Fortalecimiento de Programas de Vivienda), known as “luxury tax” only applies to houses, condos, apartments, over a certain construction value (126.000.000 colones in 2017, more less US$ 229K, this amount adjusts each year). The amount of tax to be paid goes on a scale from 0.25% to 0.55% per year, depending on the value of the Property.

Those liable for this tax shall fill out the form called “Formulario Único de Inscripción, Declaración y Pago Impuesto Solidario para el Fortalecimiento de Programas de Vivienda, Ley 8683” every 3 years, and, pay anully the tax.

 

ANNUAL CORPORATE TAX

Due date: January 30th, 2018

Staring on September 1st, 2017 all corporations, subsidiaries, and limited liability companies that are currently registered before the National Registry, as well as all entities incorporated in the future, will be subject to pay an annual. Law 9428: “Tax over legal entities”

Amount: There will be a fixed fee for inactive corporations and a progressive rate for active corporations depending on their income. As of today, the tax will be as stated below:

A chart shows the various annual corporation taxes due at the end of January.

A Breakdown of Corporation Taxes for Costa Rica

 

If the tax is not duly paid, the National Registry will not issue, certify or register any documents for the companies, furthermore, the companies will not be able to contract with the Government or any public institution

 

PROPERTY TAXES & GARBAGE COLLECTION FEE

Due date: March 31st, 2018

Real property owners must pay the Impuestos Bienes Inmuebles (Property Tax) and recolección basura (garbage collection fee) to the Municipalidad (Municipal Government) where the real property is located.

The property tax is 0.25% of the registered value of the property, which is either the purchase price paid or the value assigned by the Tax Office.

The garbage collection fee is a fixed amount, adjusted yearly, that must be collected along with the property taxes. The municipality determines the fee based on location and on whether the property is used for residential or commercial purposes.

The Municipalidad de Santa Cruz does not always charge both in the same statement, causing confusion and problems to owners. The municipality has attributed this to “lack of updated records and/or to administrative errors within the system”. Therefore, please review your statement carefully to avoid unpleasant surprises.

This property tax and garbage collection fee can be paid a year in advance or quarterly. However, if paid quarterly, you must pay before the end of each quarter to avoid interests. The first quarter of the year ends on March 31st of each year-

Owners must fill out a form to update the value of the real property every five years. Failure to do so can lead to a Municipality assessment and fines.

 

INCOME TAX

Due date: March 31st, 2018

Information to follow…

SALES TAX

Sales tax (the equivalent to VAT) stands at 13% and is levied both at the point of importation and at the point of sale (unless the sale is by way of export). It is levied on all goods with the exception of foodstuffs, medicinal products, and certain other items. If you own a business you must collect the sales tax from your customers and pass it to the government.

 

MARCHAMO

Few Costa Ricans let alone foreign retirees know what this word really means. A marchamo is a tax on each cow that is killed at a slaughterhouse. In Costa Rica this term has a similar but not as sanguinary meaning. Here it is the annual road tax that has to paid on every vehicle that circulates in Costa Rica. Foreign retirees and other expats who own automobiles or motorcycles will have to pay this tax by the 31st of December. It is estimated that aroundt 1,344, 836 vehicles will have to purchase a marchamo for the year 2016.

An automobile without the marchamo decal on the windshield is illegal after the 1st of January will be subject to a fine, the license plates may be confiscated or in the worse case scenario the car may be impounded.A Marchamo cannot be paid if there are any outstanding parking or traffic tickets issued against the car during the year or if your car has not passed the annual inspection called, RETIVE. If your marchamo sticker(calcomania in Spanish) gets damaged or lost you will need to go to any of the branches of the National Insurance Institute (INS) to get a replacement and will have show proof of ownership.

The machamo may be paid at almost 2,000 convenient locations all over Costa Rica. Many banks offer prizes and have drawings if people purchase their marchamos at one of their branches. The amount that you pay is determined by the value of your vehicle. The newer and more expensive your car, the more you will pay. For instance, I just paid $1300 for my 2013 Toyota FJ Cruiser !

Sixty-nine point five percent of what you pay goes to to the Ministerio de Hacienda or the local tax department. Eighteen point eight percent goes to a compulsory insurance policy issued by the INS or National Insurance Institute. The remaining 11.7 percent of the marchamo tax goes to several institutions including local municipalities and a couple of agencies which regulate highway safety like Cosevi.

 

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    As a real property and/or CR corporation owner in Costa Rica, you should be aware about the various taxes that need to be paid yearly.  Failure to pay them would generate penalties and lead to a collection process.   LUXURY TAX Due date: January 15th, 2018 The Solidarity Tax for the Strengtheni