On the 20th of December 2021, the Ministry of Finance issued a statement indicating that as of the 1st of January, 2022, a simplified form will be available for the declaration of the Income Tax of Inactive companies.
This procedure will be carried out virtually through the Virtual Tax Administration (ATV) platform, which can be found on the official Ministry of Finance website. The document available to make this declaration is Form D-101 (Simplified Income Tax Declaration), in which information for the fiscal periods of years 2020 and 2021 will be declared.
The legal ground for this operation is indicated by the Law for the Strengthening of Public Finances (Law No. 9635) in article 2 subsection a). This regulation obliges all legal entities to comply with the Income Tax declaration, regardless of whether they carry out lucrative activities or not.
As stated above, inactive companies will be considered as taxpayers and will be assigned the code 960113, which is intended to identify companies that do not carry out income-generating activities in Costa Rica. These non-profit companies, which will now be considered as taxpayers, must comply by presenting the Form D-101.
Inactive companies are understood as those legal entities that do not carry out generating economic activities at a national level, in other words, companies that do not produce profits or generate income. Companies that only have the purpose of owning some asset, being a vehicle, a house, shares, or other types of assets.
Before making this declaration, interested legal entities may consult the tax situation of their companies to make sure they remain in order. This consultation can be done on the Ministry of Finance official website, in the Tax Situation Consultation section.
It is worth noting the term provided by tax authorities to present this declaration. According to the statement provided by the Revenue Office, inactive companies have a two-month and fifteen-day period to comply with this obligation, which will begin to be computed from 1st of January, 2022 and expires on the 15th of March of this year (2022).
At last, it is important to take into account that to carry out this operation, the information regarding the legal representatives and the registered offices of the inactive companies must be up to date. This means that the information can be verified by the Tax Administration and must be real, thus proceeding with the filing of the Simplified Income Tax Return for the aforementioned fiscal periods of the years 2021 and 2021.
An important aspect to consider is whether the company has active assets or non-registered assets or if these are only found in its accounting books. At this time, it is highly important to be updating the value of the company’s assets. While it is true that the statement can be made by a person with basic accounting knowledge, it is preferable to always be assisted by a professional.
This type of declaration should not be confused with other tax obligations such as the payment of the tax on legal entities, the declaration of real estate or the solidarity tax for the strengthening of housing programs (ISO) and the municipal taxes; For example, a person who has a house registered in an inactive company would be responsible for paying the following taxes: a) land taxes. b) municipal taxes. c) taxes of legal entities and d) in case its value is included within established law terms, it would also have to pay the solidarity tax for the strengthening of housing programs (ISO).
In case of having an inactive company whether having registered assets or not, do not hesitate to contact us. Our commercial partner AG BPO SERVICES can help you make the declaration.