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Required Registration of Corporate Shareholders Begins in September 2019

February 12, 2019 by Tammy Hansen Snell

by Tammy Hansen Snell and Rosario Araya Arroyo

In the interest of being seen as a global partner in fighting tax fraud and money laundering, Costa Rica is implementing required registration for corporate shareholders and final beneficiaries. The information required to be reported includes who controls the corporation/association, who has the power to change who controls the entity, who has the right to vote and in what proportion, and how shares or other types of participation are divided.

IMPORTANT NOTE: Failure to comply with this required registration would mean that the Public Registry would reject requests for obtaining a copy of the corporation’s current personería, would not register any new property documents, and may fine the corporation an amount of money equal to 3 to 100 times the amount of the annual base salary. (In early 2019, the base salary is the equivalent of approximately US$740.)

If you’d like to read about the law in the original Spanish, try these links:

One page briefing:

https://www.hacienda.go.cr/docs/5be1b25e5ecdb_aviso.pdf?fbclid=IwAR2odWTPYYRUnV_WKPO0vPuFKPL1OGlAmXOBNy1vgL8_TukkXoFRYgdLShE

The law:

http://www.pgrweb.go.cr/scij/Busqueda/Normativa/Normas/nrm_texto_completo.aspx?param1=NRTC&nValor1=1&nValor2=86343&nValor3=111995&strTipM=TC

If you primarily want to know what this means you have to do and how to get it done, here are the basics:

  1. Costa Rican corporations, associations, and all branches of foreign corporations operating in Costa Rica, are required to register the names, identification numbers, addresses, and amount of voting shares of their shareholders by entering them into a database* held by Costa Rica’s Central Bank. If any shareholder is a foreign entity or a trust, then information on the final beneficiaries of those foreign entities or trusts must be submitted. Any documents obtained outside of Costa Rica for such reports must be authenticated via an apostille or a consular authentication. *https://www.centraldirecto.fi.cr/Sitio/CentralDirecto/Inicio/PaginaPrincipal
  2. This registration of shareholders must be carried out by specific legal representatives of the corporation/association, or by a person granted special power of attorney by that legal representative to perform the registration on behalf of the entity. For corporations classified as a “Sociedad Anónima” the designated person is the president. For corporations classified as a “Sociedad de Responsabilidad Limitada” the designated person is the manager or sub-manager. For those classified as an “Asociación” the designated person is an administrator with full power of attorney.
  3. Only a person with a “firma digital” (digital signature) can enter the information on the Central Bank’s website, and only native Costa Ricans or foreigners with residency can obtain a digital signature. Those who are not eligible for a digital signature must give power of attorney to someone else via an official document drawn up by a Public Notary. Once the power of attorney has been granted to someone with a digital signature and has been officially registered, then that person will go online at the Central Bank’s site and enter the required information. If you are eligible to apply for a digital signature, it would be wise to do so promptly because of the expected large increase in applications.
  4. The initial registrations must take place in the appropriate month of 2019 or 2020 based on the final digit of the entity’s identification number (see chart below). Each year the registration must be renewed AND the registration must be updated any time there is a change in 15% or more of the corporation’s share capital.
Last number of

corporate I.D.

(cédula jurídica)

Month in 2019 or 2020 to do the registration
0 or 1 September 2019
2 or 3 October 2019
4 or 5 November 2019
6 or 7 December 2019
8 or 9 January 2020

Filed Under: Corporate Law, Corporations, Costa Rica

The Corporate Tax Is Back

June 15, 2017 by Tammy Hansen Snell

by Tammy Hansen Snell and Rosario Araya Arroyo

Tip:  Put a reminder on your calendar for each January going forward that if the annual corporate tax is not paid prior to 31 January, fees/interest will accumulate until it is paid.

UPDATE: January 2019

The tax on corporations for 2019 is due by the end of January 2019.  Payments made after that date will be subject to interest charges and fees.  The amount in colones for this year is 66,930 colones for each inactive corporation, and is best paid in person at any Costa Rican bank.  Give your corporation’s identification number to the bank teller and let them know you want to pay the annual tax on corporations.  (Amounts for active corporations vary depending on the corporation’s income.)

UPDATE: January 2018

The tax on corporations for 2018 is due by the end of January 2018.  Payments made after that date will be subject to interest charges and fees.  The amount is approximately $116 (approximately 64,000 colones) for inactive corporations, and is best paid in person at any Costa Rican bank.

HOW DO I PAY?

Paying in person at any of the Costa Rican banks is recommended.  Take your corporation’s I.D. number with you and tell the bank employee that you want to pay the annual corporate tax.  It is also expected that people will be able to pay via the online banking systems for any of the various Costa Rican banks. Check for options relating to payments for Tributación or Hacienda.

WHAT IS THIS I HEAR ABOUT A REQUIRED FORM?

In addition to the tax, all inactive* corporations which want to remain inactive will need to fill out a D-140 form stating that they wish to remain inactive.  (*Inactive in this case means the corporation is not in a business which requires ongoing income reports and payment of income taxes.)

The law states that this D-140 form must be signed by a representative of the corporation, the signature of the representative must be authenticated by a notary or a lawyer, and in our Central Pacific Coast region it must be turned in at the office for Tributación in San Isidro.

Those corporate officers unable to sign the form in Costa Rica can work with an attorney who is also a Public Notary in order to name a proxy to act on behalf of their corporation.

Due to the enormous amount of corporations in Costa Rica, the government is asking that corporations file their D-140 form in a specific month in order to spread out the impact on the Tributación office.  The “deadline month” depends on the last number of the corporate I.D.:

For corporate I.D. numbers ending in 1 or 2 which existed prior to October 2017, the form was to be done prior to the end of the month of October 2017.

For corporate I.D. numbers ending in 1 or 2 which came into existence AFTER October 2017, the form must be done in February 2018.

For corporate I.D. numbers ending in 3, the form must be done in March 2018.
For corporate I.D. numbers ending in 4, the form must be done in April 2018.
For corporate I.D. numbers ending in 5, the form must be done in May 2018.
For corporate I.D. numbers ending in 6, the form must be done in June 2018.
For corporate I.D. numbers ending in 7, the form must be done in July 2018.
For corporate I.D. numbers ending in 8, the form must be done in August 2018.
For corporate I.D. numbers ending in 9, the form must be done in September 2018.
For corporate I.D. numbers ending in 0, the form must be done in October 2018.

Filing the D-140 form in the appropriate month is important.  A fine equal to $400 per month will be charged for each month late a corporation’s form is, up to a maximum fine of $2400.

All new corporations being created will need to complete the D-140 form after their corporation has been inscribed and given an I.D. number.  Newly created corporations will pay a pro-rated amount of the annual corporate tax.

WHEN DID THE CORPORATE TAX COME BACK?

Beginning in September 2017, corporations in Costa Rica began to again be required to pay an annual tax. After certain articles in the previous corporate tax law were declared unconstitutional in 2015, the presumption was that it would be rewritten, which it was. The new version, Law #9428, was passed into law 22 March 2017, and went into effect 1 September 2017. If you’d like to read more about this law and its “reglamento” in Spanish, you can find a .pdf of the law here, and a document put together by the Ministerio de Hacienda here.

WHO HAS TO PAY?

All corporations – whether active or inactive – will be required to pay this corporate tax, but the amount of tax paid will be lower for inactive corporations. As a general rule, active corporations are those running a business and which are required pay taxes in addition to the annual corporate tax. Inactive corporations are those which exist to be the owner of property such as a real estate asset or a vehicle.

WHEN DO I PAY?

Each year the annual tax on corporations will be payable as of 1 January, and due by the end of January.

[Read more…]

Filed Under: Corporate Law

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