As the year progresses, it is important to remember your tax responsibilities. One of the most relevant commitments is the Income Tax declaration and payment, whose due date is approaching. To avoid penalties, it is crucial to be aware of deadlines and proper procedures.
What is the income tax?
It is a tax that charges profits or earnings obtained by individuals and companies engaged in lucrative activities in Costa Rica.
Who must pay it?
- Individuals: Employees, independent professionals, and self-employed workers.
- Legal Entities: Companies, corporations, and associations that generate income in the country.
Income tax rates
Rates vary according to the type of taxpayer:
- Individuals: Progressive rate from 0% to 25% based on annual net income.
- Legal Entities: General rate of 30% on taxable income, with reduced rates for some SMEs.
How is it calculated?
- The gross income is determined.
- Deductible costs and expenses are subtracted to obtain net income.
- The corresponding rate is applied to calculate the tax payable.
Payment deadline and method
Income tax is paid annually, with its due date scheduled within the first three months of the following year after the end of the fiscal period. The tax return must be submitted to the General Directorate of Taxation (DGT).
Consequences of Late Payment
If you fail to comply with this obligation, you may face:
- Late interest, set by the Central Bank of Costa Rica.
- Fines of up to 20% of the owed amount.
- Judicial collection process, which may result in asset seizure and other penalties.
We understand that tax compliance can be complicated. That is why at ERP Lawyers we offer a comprehensive service to manage your income tax declaration and payment, avoiding errors and penalties.
Do not miss the deadline. Contact us and leave this process in expert hands.
