The tax man throws the citizens a curve ball

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

The 2004 tax year was full of surprises.  One major surprise was that the tax filing deadline for Form D.101 Version 2 was Dec. 15 instead of the normal Dec. 31. Tributación Directa, the tax collecting agency, and its parent, the Ministerio de Hacienda, the treasury department, did little to announce the change. The earlier date was not on their Websites, which continue to work erratically.  

Historically, the tax deadline for filing and paying income taxes was Dec. 31. An obscure change in the law moved the date to two and one-half months after the close of a company’s fiscal year.  Most businesses use Oct. 1 to Sept. 30 as the fiscal year.  

The deadline now falls on Dec.15. If that date falls on a weekend, the following Monday is the filing date.  This fact has been published only in obscure places.  For the past two years, Tributación gave extensions to Dec. 31, leaving most filers to believe this is the traditional deadline. 

A.M. Costa Rica has reported the incorrect deadline from time to time based on incomplete information from Tributación Directa. 

The new tax lottery is another major surprise.  The last tax lottery was in 1994.  To participate, one needs to put five invoices in an envelope and deposit it in any Banco Credito Agricola branch.  

The prizes make the process worth the effort.  The top prize is 5 million colons. 

Be sure you don't toy with Tributación Directa

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Can one be thrown in jail for taxes in Costa Rica?  The answer is yes.  Articles 90 and 92 of the Code of Tax Norms and Procedures established jail terms for tax offenders. 

Are many people put in jail?  The answer is no.  The whole process is new to the country.  However, thanks to the International Monetary Fund and the U.S. Internal Revenue Service, Costa Rica is getting better at collecting its taxes and prosecuting those who do not pay. 

The tax department of Costa Rica, Tributación Directa, is still disorganized in many areas, especially with helpful assistance to the taxpayer.  Actually, it can be a nightmare trying to get answers to tax questions or even to find out what one owes.  This reporter waited four hours in one of those musical chair routines made famous at government offices to have someone check a company’s tax records.  

If you do not live in Costa Rica or have not had the pleasure to experience this ritual, it is where 50 or more people are sitting in chairs. As one is called, everyone moves over a chair until one reaches the first chair.  So, this reporter had to move 50 times in four hours as only one person was answering tax lookup queries. 

Should one take advantage of the disorder and not file the proper forms and pay taxes in Costa Rica?  The answer is a big NO.

Tax collector aggressive but not very helpful

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

This article was very frustrating to write.  Nothing at the Websites of Tributación Directa or Hacienda worked. Tributación Directa is the name of Costa Rica’s tax authority, and Hacienda is the treasury department.  The search engines on both sites are worthless.  

Trying to find a simple schedule of this month's important tax deadlines was fruitless.  One is directed to the same page repeatedly saying the webmaster is sorry nothing works.  A great help when you want to pay your taxes.  

A personal visit to Tributación Directa was just as disappointing. When trying to request a brochure or even a simple sheet of paper with the tax due dates, a woman said: “Come back in December.” 

All this disorganization may be a result of the Tributación Directa’s move to a gorgeous new building in Barrio Don Bosco close to Jardines de Recuerdo, Costa Rica’s most widely known funeral parlor.  This is an appropriate place for a tax authority because death and taxes are the only two things that we can be certain of in this lifetime.