Changes in Tax Rules in Costa Rica

Increased fines, opening of bank secrecy and imprisonment are some of the changes that have been included in the regulations since April.

Monday, May 19, 2014

From a statement issued by the Institute of Chartered Accountants of Costa Rica (CCPCR):

May, 2014. Since last April the Regulation Tax Procedures, went into effect which aims to regulate the changes suffered by the Code of Norms and Tax Procedures Law 9069 (Law for Strengthening Tax Management) in force since 28 September 2012, with i9ncreases in the penalties and periods of limitation for taxpayers who have inconsistencies in their tax declarations.

According to the Institute of Chartered Accountants of Costa Rica (CCPCR) of all modifications made in the Code, five are the most noteworthy.

Suspensions

One of the changes is in Article 81 of the Code, which relates to penalties to taxpayers. Previously, after a verification process initiated by the IRS to a taxpayer, a tax increase determined by this body carried a penalty of 25% if there was not fraud, and 75% if there was; as long as the amount did not exceeded 200 base wages, otherwise it would be considered a tax crime punishable by imprisonment. With the changes, the penalties increase dramatically and are now divided into three groups: a) mild (50% penalty), b) serious (100% penalty) and c) very severe (150% penalty), all on the final amount determined by the IRS and applied to each type of sanction imposed. If fraud is determined worth more than 500 wages, it is considered a tax crime punishable by imprisonment.



More on this topic

VAT in Costa Rica: No Fines or Sanctions until October

July 2019

The Legislative Assembly approved a moratorium of three non-extendable months, in sanctions, arrears, interests, fines or any other sanctioning disposition, related to the collection of the value added tax, which became effective last July 1.

Taxpayers qualified by the Tax Administration as large national taxpayers and large territorial companies are excluded from this moratorium, explains a statement from the Legislative Assembly.

Panama: Strengthen Penalties Against Evaders

January 2019

The law that criminalizes tax evasion was approved by the National Assembly when the amount defrauded in a fiscal period of one year is equal to or greater than $300.000.

With a majority vote, Project 591, which criminalizes tax evasion in the Criminal Code and is considered a crime resulting from money laundering, was approved in the third debate, informed the Legislative Assembly.

Costa Rica: Embargo Eliminated from Law on Tax Evasion

June 2015

The new draft law on tax fraud prepared by the opposition and which must be reviewed by the Ministry of Finance excludes the concept of collection and seizure by administrative authorities.

After having negotiated for the opposition bloc in Congress to amend the bill originally submitted by the Ministry of Finance, the new bill is ready and among the changes is the elimination of the incorporation of the concept of fines and embargos imposed administratively. It maintains the collection and seizure of tax debts through the courts.

Costa Rica: Collection of Tax Liabilities Upfront

February 2015

The Attorney General's Office is recommending to the Constitutional Court that it reject the appeal which seeks to outlaw the power of the taxation department to proactively collect tax debts.

The appeal to the Constitutional Court by a group of taxpayers is still under consideration by the judges and although there is still no resolution to this effect, the Attorney General of the Republic "...

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