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Editor's Note: While this article was accurate at the time of publication, some information may now be outdated.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! Christmas is closing in on everyone. So are some critical deadlines. Two critical tax-filing dates for the D-151 and the D-101 are just around the corner.
One that people may have forgotten or chosen to ignore is the deadline to get out of a Costa Rican company before it is too late, and the country begins suing liable parties for the company tax. This should not be confused with income tax.
The tax is the Impuesto a las Personas Jurídicas, Ley 9024, known to most as the company assessment tax. Many people are still unaware the law provides several bailout provisions. The cheapest and easiest one is through resignation, outlined in Transitorio IV of the law. This provision allows anyone with judicial and extrajudicial authority in a company to relinquish the post. It also allows anyone with a full power of attorney to resign. One can get out without paying any current company taxes due. Most people do not know this. They think a company needs to be up-to-date for them to resign.
The deadline is April 1. Five months may seem like a long time, but it is not in Costa Rica, with the holidays just around the corner. That's a time little to nothing gets done. After April 1, any taxes due have to be paid before the Registro National will process a resignation.
This transitorio was created as a bridging mechanism to assist those not interested in being part of a company anymore and give them the ability to get out and not be liable. The fact is, everyone with legal authority or a full power of attorney is liable personally for this assessment. So far, all attempts to kill it have failed in the Sala IV.
There are expats that do not even know if they are in a company or if they have legal authority or power. It is best to check before being served a collection suit for the tax with interest, penalties, and attorney’s fees added to the bounty.
This is what one needs to do to check standing in companies at the Registro Nacional Digital:
1. sign up for an account or login,
2. go to the section on the left side of the page named Índice De Personas Físicas,
3. fill in the fields for Nombre (name), Primer Apellido (first last name) and Segundo Apellido (second last name, if you have one), and
4. click on Buscar (search).
Registro operators are not good about inputting information from legal documents into their computers, so try different variations. Every so often, last names are confused with first names or spelled entirely wrong. So if an identification number is available, try it too.
The search lists all nominations, substitutions (called afectaciones) and powers of attorney for an individual. One will be presented with a list with green check marks and red balls. A check mark indicates a listing requiring attention, and a red ball means no record.
The next step is a little more difficult. Only legal representatives need to worry about liability, so if a listing is found, one needs to check his or her responsibility. To do so, one has to buy a Certification Literal of the company in question to check and see if he or she has Representación Judicial y Extrajudicial or judicial and extrajudicial representation.
Powers of attorney are listed in the Poders section of the list. If one finds they have one, they must purchase a Certificación Citas Poder report to find out if the power is a full power.
Merging companies together or dissolving them completely can also reduce the company assessment burden, but to do either requires all taxes due must be paid. The bridging alternatives for these two scenarios are long past. The only one left is resignation.
Here are the instructions to resign from a company
1. Print a current Certificación Literal using the Registro Nacional’s digital service. Certificación Poderes Persona Jurídica cannot be used if taxes on a company are due.
2. Prepare a resignation letter in Spanish to the stockholders of the company.
3. Try to deliver the letter to company’s last known address.
4. Go to an attorney and present the certification and the resignation letter, so it can be put in their protocolo or legal book.
Once this is done, the notary will deliver the resignation to the Registro Nacional and pay a 3,000-colon filing fee to have the document registered. Attorney’s fees for the work are around 50,000 colons, but may vary from one legal professional to another.
One might think, “Darn, this is too complicated, no one is going to do anything if the taxes are not paid.” The lawmakers put in the out clauses to give people the opportunity to get out before the wrath of the law takes effect.
The government wants this money as they do any tax due, and Ley 9024 also has the provisions necessary for its collection including, as stated above, personal liability for all legal representatives.
Have questions? Consult a good professional. Do not miss this window. It is the last one left in the law.
Article first published in A.M. Costa Rica on October 28, 2013.
