ABC of Income Taxes

Businesses that operate in Costa Rica as well as those who provide professional services have to pay an income tax, which varies whether it is a corporation or a physical person. They are commonly called “taxpayers”, and such tax is calculated over the income produced during the fiscal year, starting from October 1st to September 30th of the next year.

In the case of a physical person, the tax is applied over salaries, pensions, and other personal remunerations.

In the case of Corporations, the tax is applied over the profits gained in the accounting period. According to the Costa Rican Income Tax Law, the following should be registered as taxpayers:

* Legally registered and unregistered Costa Rican Corporations
* Branch offices, agencies and other permanent establishments of corporations without legal address in Costa Rica.
* Trusts created according to Costa Rican laws.
* Successions
* Corporations with legal address in Costa Rica, even if they were not created in the country.

In both cases, legal and physical person, the country of origin or jurisdiction is not relevant, as long as they are active in Costa Rica, and incomes are perceived in our territory.

In order to pay the corresponding amounts, both cases need to complete and present Form D-101 before the Tax Authorities, form also called “Affidavit for Income Tax”.

GLC provides legal services in Tax Law, contact us if you require assistance.