Global Tax Alert (News from Americas Tax Center) | 24 April 2014

Costa Rica Taxpayers required to correctly register their tax domicile

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On 2 April 2014, Costa Rica published in the Official Gazette, Regulations of Tax Procedures, Executive Decree No. 38277-H (the Regulations), which requires all taxpayers whose tax domicile registered before the Tax Authorities differs from the one required by the Tax Code of Standards and Procedures (the Tax Code) to register their correct tax domicile. Taxpayers have 15 business days beginning 3 April 2014, to register (i.e., before 5 May 2014).

Pursuant to the Tax Code, the tax domicile must be registered according to the following rules and criteria:

  • Individuals: The location of their habitual residence or the location where the management of their business activity is effectively performed.
  • Legal entities and entities without legal personality: Their registered office or location where their management is effectively performed.
  • Individuals, legal entities and entities without legal personality domiciled abroad: Individuals, legal entities and entities without legal personality with a permanent establishment (PE) in Costa Rica should follow the above rules. In the absence of a PE, the tax domicile must be: (i) the legal representative's domicile; or (ii) in the absence of a legal representative, the place where the taxable event occurs.

Noncompliant taxpayers are subject to penalties provided for under Section 78 of the Tax Code (i.e., approximately US$365 for each month of noncompliance1).

If needed, EY can provide assistance to comply with this obligation.

A Global Tax Alert with the most important provisions of the Regulations will be available shortly.


1. The fine is capped to a maximum amount of approximately US$2,180.00.

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

Ernst & Young, S.A., San José, Costa Rica
  • Rafael Sayagues
    +506 2208 9880
  • Alexandre Barbellion
    +506 2208 9800

EYG no. CM4371