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For
Corporate entities the following tax table prevails:
Gross
income up to ¢21,468,000 10%
Gross income up to ¢43,183,000 20%
Gross income over ¢43,183,000 30%
Any
industrial corporation is allowed to make deductions
from their annual gross income according to the list
of deductible items listed on page 2 of this document.
The
tax administration can deem a deduction invalid under
the following criteria: belonging to another taxes
period; non-income generating; excessive or unreasonable.
Depreciation
and Other Allowances
Depreciation rates can not be higher than those prescribed
by law, unless so authorized by the tax administration.
Companies can choose either the straight-line or the
sum-of-digits methods of depreciation, though, once
chosen, the method must be used consistently. Accelerated
depreciation is allowed in certain cases Other allowances
are: organizational and pre-operational expenses that
can be paid from one to five years; operational losses
can be carried forward up to three years for industry
and five years for agricultural operations.
Tax
on Corporate Assets
The Tax Adjustment Law introduced a 10% tax on the
assets of corporations whose assets exceed ¢30,000,000.00.
The law has several exemptions. An accountant should
be consulted as to the application of this law on
your particular situation.
Tax
on Capital
This tax is also known as the "Education and
Culture Tax". Every legal entity (corporation)
as well as its subsidiaries, or agencies of a foreign
company, which are duly recorded in the Costa Rican
Mercantile Registry, must pay an annual tax based
on its net capital or equity (assets less liabilities),
according to the following table:
For
net capital up to ¢250,000: ¢750 per year
(also applicable to negative capitals, i.e., liabilities
higher than assets).
For net capital of ¢250,001 and up to ¢1,000,000:
¢3,000 per year.
For net capital over ¢1,000,001 and up to ¢6,000
per year.
For net capital over ¢2,000,001: ¢9,000 per
year.
Annual
Property Taxes
Starting November 30, 1995, the law states that the
administration and collection functions for property
taxes to the Local Governments (Municipalidades) where
the property is located.
Under the new law, it will be these entities'
responsibility to conduct property appraisals and
collect the corresponding property tax.
The
property tax is established on an annual basis and
may be paid annually, by semester or by quarter depending
on the procedures established by each Local Government.
For the next five years, the property tax payment
will be 60% of the appraised value of the property.
Starting on year six, the municipality may set its
own rate not to exceed 1%.
Transfer
Taxes
There is a 3% property transfer tax. This tax is based
upon the registered value placed on the property transfer
deed at the time of sale.
Tax
on Distributed Profits / Dividends
Whenever a corporation distributes its profits as
dividends, the following tax is applied:
When the profits are distributed to corporation partners,
the corporation, for payment to fiscal authorities
must withhold a 15% tax.
When
dividends are distributed by a corporation whose shares
are registered in an officially recognized stock exchange,
a 5% tax must be withheld only if the shares were
acquired through a stock exchange.
If
the partner is another corporation also subject to
this withholding tax and with its capital duly registered
in Costa Rica, the tax is not applicable.
Sales
Tax
The tax Adjustment Law increased the sales tax from
10% to 15%. Starting on November 18, 1995 this new
sales tax will be in effect for the next 18 months.
After this period of time, the rate drops to 13%.
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