Navigating Costa Rica's Tax Landscape in 2025

While not quite a "sting operation," Costa Rica's tax authorities have significantly tightened regulations in recent years, particularly concerning inactive companies and real estate holdings. If you own property or a business in Costa Rica, understanding these updates is crucial for tax compliance and avoiding hefty penalties.

For many years, it was common practice to set up an "inmobiliaria" (a company holding real estate) to facilitate property transfers. This allowed for faster sales and often bypassed real estate transfer taxes. However, a significant number of these entities never properly registered with the Tributación Directa (the tax department). With an estimated 308,000 companies at the Registro Nacional (national registry) and far fewer registered for tax purposes, the government has been on a mission to rectify this to boost tax collection and align with international standards.

The Current Landscape: Inactive Companies and New Requirements

The days of operating an inactive company without tax obligations are largely over. While historically, many inmobiliarias didn't need to file tax returns because they weren't engaged in active business, that has changed.

Key Update: Informative Declaration for Inactive Entities (Form D-195) As of 2025, all inactive legal entities in Costa Rica are required to file an Informative Declaration for Inactive Entities (Form D-195). The annual deadline for this crucial filing is April 30th. This form requires companies to detail any recorded and unrecorded assets, cash balances, and explain why they are not performing economic activities. Failing to file this can result in significant fines and restrictions.

The initial "special one-time fiscal tax" (Form D-175) has evolved into this more systematic approach to track and regulate these entities. The focus is now on ensuring all legal entities, active or inactive, are properly accounted for and compliant.

Why the Increased Scrutiny?

The heightened focus on tax compliance isn't arbitrary. The International Monetary Fund (IMF) has been pushing Costa Rica for over a decade to improve its tax collection mechanisms. Strengthening the tax system is vital for the country's economic stability. Bringing inmobiliarias onto the tax books is a critical step in this process.

While the immediate impact might not be substantial tax revenue from all inactive companies, the long-term goal is clear: to broaden the tax base. Once registered, these companies may become subject to taxes like the Timbre de Educación y Cultura (Stamp of Education and Culture), an annual fee for all registered companies.

Crucial Deadlines for 2025 Tax Compliance

Staying informed about Costa Rican tax deadlines is paramount. Here's a general overview, but always consult with a local tax attorney or accountant for personalized advice.

Note on D-175: The D-175 was a specific special tax. The current framework for inactive companies revolves around the annual D-195 filing and the corporate tax.

The Consequences of Non-Compliance

The fines for not filing required forms or paying taxes can be substantial. For the D-195, expect a fine of around 76,500 colones (approximately $185 USD).

However, the most significant sanction is the inability to perform movements at the National Registry. This means you won't be able to:

• Transfer property when you want to sell it.
• Change the company holding the property.
• Change powers of attorney or directors.

Essentially, your Costa Rican real estate investment can become frozen and unsellable until you resolve your tax obligations.

Wise Moves for Property Owners and Businesses

As Benjamin Franklin wisely observed, "In this world, nothing is certain but death and taxes." The smartest move is to ensure full tax compliance.

• Register all legal entities with the Tributación Directa, even if inactive.
• File the annual D-195 for inactive companies by April 30th.
• Pay the annual corporate tax by January 31st.
• Keep up-to-date with all other relevant tax deadlines.
• Consult with a qualified Costa Rican attorney or accountant.

By proactively managing your Costa Rican tax obligations, you can avoid costly penalties, ensure the liquidity of your real estate assets, and navigate the country's evolving financial landscape with confidence.