Global Tax Alert (News from Americas Tax Center) | 29 October 2013

Costa Rican Tax Authorities require audited financial statements from large taxpayers

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The Costa Rican Tax Authorities issued resolution N° DGT-R-037-2013 (the Resolution), published in the Official Gazette on 18 October 2013 and effective as of that date. The Resolution requires so-called “Large National Taxpayers”1 and “Large Territorial Companies”2 to submit financial statements audited by an independent Certified Public Accountant (CPA).

The Resolution requires the following audited financial statements to be submitted: (i) a balance sheet; (ii) an income statement; (iii) a statement of changes in equity; and (iv) a cash flow statement. Additionally, the companies must submit explanatory notes on the most significant accounting policies, and other explanatory notes contained in the CPA’s opinion. The documents must be provided in a digital form.

The audited financial statements must be submitted within six months from the end of the tax year (i.e., 30 September), even if the taxpayer is not subject to income tax.

The deadline to submit the audited financial statement for tax year 2012 is extended to 15 December 2013.

Noncompliant taxpayers are subject to penalties provided for under Section 83 of the Tax Code of Standards and Procedures (e.g., 2% of the gross income reported on the tax return of the previous tax period for the failure to submit audited financial statements). Companies operating under the Free Trade Zone (FTZ) regime may have their FTZ status revoked and consequently lose the tax incentives and benefits thereunder for failing to submit audited financial statements.

Endnotes

1. Large National Taxpayers (in Spanish: Grandes Contribuyentes Nacionales) are those who meet at least one of the following criteria: (i) the company’s average rate of tax collection for the three previous tax periods equals or exceeds ¢250,000,000.00 (approximately US$495,000); (ii) the average gross income of the three previous tax periods equals or exceeds ¢40,000,000,000.00 (approximately US$80 million); (iii) the average total assets equals or exceeds ¢40,000,000,000.00 (approximately US$80 million); (iv) entities that are of a fiscal interest for the tax authorities and which are regulated by law by the administrative authorities responsible for overseeing financial entities (i.e., the Financial Entities General Superintendence, a.k.a. SUGEF), securities (i.e., the Securities General Superintendence, a.k.a. SUGEVAL) and pensions (i.e., the Pensions Superintendence, a.k.a. SUPEN).

2. Large Territorial Companies (in Spanish: Grandes Empresas Territoriales) are those who meet at least one of the following criteria: (i) the company’s average rate of tax collection of the three previous tax periods equals or exceeds ¢80,000,000.00 (approximately US$160,000); (ii) the average gross income of the three previous tax periods equals or exceeds ¢20,000,000,000.00 (approximately US$40 million); (iii) the average total assets equals or exceeds ¢20,000,000,000.00 (approximately US$40 million).

For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., San José, Costa Rica
  • Rafael Sayagués
    +506 2208 9880
    rafael.sayagues@cr.ey.com
  • Alexandre Barbellion
    +506 2208 9800
    alexandre.barbellion@cr.ey.com
Ernst & Young LLP, Latin American Business Center, Houston
  • Priscila Maya
    +1 713 750 8698
    priscila.maya@ey.com

EYG no. CM3918