The new obligation of Inactive Companies

The new obligation of Inactive Companies

In compliance with the reforms introduced in the Income Tax Law N° 7092 and according to the resolution of the Ministry of Finance number DGT-R-075-2019 and its reforms, inactive companies registered in the Single Tax Registry under the activity “Legal entity legally constituted”, must file the Simplified Income Tax Return[1] (Form D-101), for the fiscal periods 2020 and 2021. The deadline is November 16th, 2022; if not filed on time, the penalty to which companies are exposed is 50% of a base salary.

Inactive Companies

Inactive Companies are companies or legal entities that do not develop any type of lucrative activity (they do not sell goods or services and therefore do not register income and do not issue invoices) and do not generate profits within the Costa Rican territory, because their only purpose is to own an asset. This would include personal companies where assets such as a house, land, a recreational property, shares or personal vehicle, among others, are owned.”[2]

It is important to mention the exception made by the Ministry of Finance, which indicates that “if the company had any registered activity in any month of the tax period it must file the normal income tax return, instead of using the simplified form.”[3]

Procedure
To fill out the tax return, the taxpayer must access the Virtual Tax Administration (ATV) portal on the Ministry of Finance website[4]. Likewise, it is necessary for the company to update the tax domicile and legal representation data by means of form D-140.

Information to be declared
The inactive legal entities must submit the following information:

  • Total assets.
  • Total liabilities.
  • Capital stock.

If you have any questions or require support with the new obligation of Inactive Companies, please feel free to contact us and we will be happy to assist you.

TACTIC Legal Studio

[1] In the next periods, the form D.135 called “Declaración Patrimonial para Personas Jurídicas Inactivas” will be presented and will be made available to the interested parties in the ATV system.

[2] Pérez, Carlos Cordero. 2021. “Sociedades inactivas deben presentar declaración de renta a más tardar en marzo del 2022.” La Nación, Diciembre 21. Available at: https://www.nacion.com/economia/finanzas/sociedades-inactivas-deben-presentardeclaracion/IY56KUOXMBCJTMKHEUWNQYOOCI/story/. Art. 4 of the Regulations to the Income Tax Law, Executive Decree No. 18445-H.

[3] González, Adison. 2021. “¡Evite sanciones! Sociedades Inactivas deben presentar declaración de renta en marzo 2022.” La República, Diciembre 22. Available at: https://www.larepublica.net/noticia/evite-sanciones-sociedades-inactivas-deben-presentar-declaracion-de-renta-en-marzo-2022

[4] https://www.hacienda.go.cr/ATV/Login.aspx

 

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