Most expats who come to Costa Rica choose to use corporations to protect their assets from liability. These expats set up something called ‘inactive corporations,’ meaning that they do not generate any revenue or pay income or sales taxes, but they do hold assets like vehicles and properties to keep them as legally separate entities in case of legal action against the owner. This is not mandatory in Costa Rica, but it is advised as a precautionary measure.
On the 22nd of March of this year, Corporate Tax Law #9428 was approved, requiring all active and inactive corporations to pay annual taxes. It is a successor to Corporate Tax Law #9028 of 2011, which was declared unconstitutional in January of 2015.
The new tax is set to be implemented on the 1st of September for 2017 and will be prorated for this year. Banco de Cost Rica will begin collections in July. [Read more]