As the world grapples with the pandemic of COVID-19, Costa Rica has joined other nations in providing relief in several areas. One of them is a new law which provides for some temporary tax breaks or deferral periods. In upcoming articles, we will talk about labor and Social Security measures that have also been recently approved.
On March 20, 2020, Law #. 9830 Alivio fiscal ante el COVID-19, ‘Tax relief related to COVID-19’ was published in La Gaceta.
The most relevant aspects of this law are:
1. Partial payments of Income Tax for 2020
• The taxpayers referred to in the Income Tax Law, are exempt, for one time only, to make partial payments of the income tax that they should make in April, May and June 2020.
2. Deferral period on the payment of VAT TAX (value added tax):
• Taxpayers of this tax must file, during April, May and June 2020, the tax return form D-104 for March, April and May 2020, and may not pay the value-added tax (VAT).
• Taxpayers who take advantage of this opportunity must make the payments for the months covered by the moratorium no later than December 31, 2020, or make a payment arrangement with the Tax Administration, ‘Dirección General de Tributación’ to avoid incurring interest payments or fines, under the conditions and terms defined by the Tax Administration in its regulations.
3. Exemption from VAT TAX (value added tax) payment in commercial leases
• Commercial leases are exempt from paying the VAT tax for April, May and June 2020, only if both, the lessee and lessor, are duly registered as taxpayers in ‘RUC’ Registro Unico de Contribuyentes,Single Tax Registry of the Dirección General de Tributación, in the General Income Regime or the Special Agricultural Regime.
4. Deferral period on the payment of Selective Consumption tax:
• Taxpayers of this tax, and who are duly registered as taxpayers in ‘RUC’ Registro Unico de Contribuyentes,Single Tax Registry of the Dirección General de Tributación, must file their tax returns for March, April and May 2020, and may not make the payment of the tax during April, May and June 2020.
• Taxpayers who take advantage of this possibility must enter the respective tax for the months covered by the moratorium no later than December 31, 2020, or make a payment arrangement with the Tax Administration ‘Dirección General de Tributación’ to avoid incurring interest payments or fines, under the terms and conditions defined by the Tax Administration in its regulations.
5. Deferral period on the payment of importation customs duties and taxes, ‘impuesto selectivo de consumo’:
• Importers, and who are also duly registered as taxpayers in ‘RUC’ Registro Unico de Contribuyentes,Single Tax Registry of the Dirección General de Tributación, may nationalize, during April, May and June 2020, the goods without paying the corresponding dues. Agricultural and livestock products classified from chapters 1 to 24 of the Sistema Arancelario Centroamericanoare excluded from this measure and the national regulations will be maintained, in the event of a possible shortage.
• Taxpayers who take advantage of this possibility must enter the fees corresponding to the months covered by the moratorium no later than December 31, 2020, or make a payment arrangement with the Tax Administration to avoid incurring interest payments or fines, under the terms and conditions defined by the Customs Administration in its regulations.
Because this tragic situation is evolving rapidly, it is important to stay informed of the various areas in which Costa Rica is helping to relieve various financial burdens. We are at your service to answer your questions and provide guidance at info@gmattorneyscr.com
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