What it is about, what are the aspects that must be taken into account when submitting it, and how non-compliance can lead to different sanctions including million-dollar fines.
Key aspects of the Declaration of Inactive Companies
The particularity of this type of companies is that although they are registered in the National Registry, they do not carry out any lucrative activity, and therefore they do not issue invoices or obtain income. However, this is not an impediment for them to possess assets in their name such as vehicles, properties or other types of assets that do not generate profits.
In Costa Rica, inactive companies must declare to the Tax Administration whether they own assets or not, and their obligations if they have them, corresponding to the ordinary fiscal period of the income tax of the previous year (covers from January 1 to December 31). . To accomplish this goal, Form D-195 must be completed, which was originally designed for individuals who had not filed their information return using the simplified Form D-110.
Among the requested information that must be included in this instrument are: the reason why there is no lucrative activity; if you have registered and unregistered movable and/or real estate property; if you have balances in cash, banks, documents and accounts receivable, indicating the amount and the amount or balance in colones; If you have assets or rights abroad, and what type; if you have intangible assets (such as a commercial or industrial trademark, licenses, copyrights, invention patents or other types of patents); if you have antiques, collectibles, jewelry, works of art, livestock, short or long-term debts; among others.
Failure to submit this information return on time and correctly may result in penalties, including financial fines ranging from ¢1,386,000 to ¢46,220,000, approximately.
The sanction to the newspaper Extra
One of the most well-known and resonant cases of recent times is that of the newspaper Extra (Sociedad Periodística Extra Limitada). In 2023, the General Directorate of Taxation (DGT) of the Treasury closed it for five days, due to a sanction that became final in 2022. The reason for it was the failure to cancel the Value Added Tax (VAT) within the period established in the payment request that the Tax Administration had issued.
To account for this decision, and express its disagreement since according to the media it became effective only 20 months later, the newspaper published a publication in its digital version reporting what happened.
Our team of corporate law experts is here to help you put your business affairs in order and advise you on these filings to avoid problems with the Treasury. To receive more information do not hesitate to contact us.
