Costa Rica: Law for Corporate Income Tax Return

The Legislative Assembly is preparing to consider, in the first debate, a bill aimed at exempting inactive companies from the obligation to file an income tax return.

Friday, November 27, 2020

The file of this legislative proposal is number 22,307 and was presented by Deputy Pablo Heriberto Abarca. The initiative will be discussed in the Assembly, despite the opposition of the Ministry of Finance.

Carlos Vargas, general director of Taxation, told that "... traditionally in the country what has been stylized is that this type of entities is used as a means of holding goods, which does not denaturalize the figure, but does not mean that tax controls should not be carried out on them."

For Deputy Abarca, it is a matter of common sense, because if the company does not register activity, it will not generate profits, therefore, an income tax return should not be made.

There are deputies in the Assembly who, like the Ministry of Finance, are against it.

Catalina Montero, explained that "... it is known that for many years’ corporations were used as a mechanism to avoid the tax on the transfer of goods. It leaves open the possibility that some of these companies have used the figure to evade or cover up illegally acquired goods."

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