The Costa Rica Tax Authority published Resolution No. MH-DGT-RES-007-2023, regarding the annual informative return that all inactive entities (i.e., those with no economic activity) must file, in the Official Gazette on 29 March 2023.
The Resolution published by the Tax Authority contains provisions related to:
The definition of legal entities and the power of the Tax Authority to classify them as "active" or "inactive," in accordance with the provisions of the Income Tax Law Regulations
Ex officio registration of legal entities in the Single Tax Registry (in Spanish, “Registro Único Tributario, RUT”)
The obligation of legal entities, regardless of whether they carry out a lucrative activity, to provide information to the Single Tax Registry and to comply with formal and material obligations
The duty of each inactive entity to file an informative return using Form D-195, which will be available on the digital platform of the Tax Authority (in Spanish, “Administración Tributaria Virtual, ATV”)
Penalties applicable for failure to file the informative return or failure to provide information to the Single Tax Registry
Provisions applicable to legal entities that obtain capital income subject to single and definitive withholdings, which will not be considered to be inactive entities
Filing of the Inactive Entities Informative Return, Form D-195
Every inactive entity, legally constituted and registered in the Single Tax Registry, must file the Inactive Entities Informative Return, Form D-195, no later than 30 April of each calendar year, using the form available on Tax Authority’s digital platform.
For one time only, the deadline for filing Forms D-195 pertaining to fiscal years 2020, 2021 and 2022 that must be carried out in the year 2023 is extended until 31 May 2023. The Resolution provides that, after 31 May 2023, noncompliance in the filing of the informative return may be sanctioned.
Inactive entities that, as of 29 March 2023 (when the Resolution was published in the Official Gazette), have filed an informative return corresponding to the fiscal years 2020, 2021 and 2022 by using the Simplified Form D-101, do not need to submit a new return using Form D-195.However, inactive entities that have not yet complied with this formal duty by filing a Simplified Form D-101 for those fiscal years, must submit a return for each of the pending periods using the new Form D-195.
Content of the Inactive Entities Informative Return, Form D-195
In Annex I, the Resolution models the information that the taxpayer should provide on the Form D-195; Annex II provides a guide for filling out the information required of inactive legal entities.
Specifically, the Form D-195 model and the guide for its completion require inactive entities to provide:
A. The reason or reasons why the legal entity does not have economic activities
B. Information on whether the inactive entity owns trademarks, patents, movable and/or immovable property registered in the National Registry
C. Information on whether the inactive entity owns unregistered real estate
D. Information on whether the inactive entity has non-registrable assets
D.1. Information on whether the inactive entity have balances in cash, banks, documents and accounts receivable, with the detail of the number of accounts and amount or balance in Costa Rican Colones (CRC)
D2. Information on assets or rights abroad, detailing the type of asset or right (i.e. shares, real estate, personal property, bank accounts, investments in securities or financial instruments, others), the date of acquisition and value of acquisition or current balance in CRC
D3. Information on memberships to clubs or similar, detailing the type of identification, identification number, name or business name of the club or organization, date of acquisition, and value of acquisition in CRC
D4. Information on intangible assets (commercial or industrial brand, licenses, copyrights, invention patents or patents of another type), detailing the acquisition or development value in CRC
D5. Information on other types of assets (e.g., antiques, collectibles, jewelry, works of art, livestock or others), detailing the acquisition value or current value in CRC
E. Short-term and long-term debt information
E1. Information on debts with entities supervised by the General Superintendency of Financial Entities (in Spanish, “Superintendencia General de Entidades Financieras, SUGEF) or another superintendence, detailing the name of the entity, type of credit, date of incorporation, term, amount of credit, and monthly fee for each credit
E2. Information on debts with other types of creditors, detailing the type of identification, identification number, name or business name of the creditor, type of credit, date of constitution, term, amount of the credit and monthly fee for each credit
F. Identification of the natural and/or legal persons that assume the expenses and obligations of the inactive entity, detailing the type of identification, identification number, name or company name and approximate annual amount in CRC
In all cases, the amounts must be completed in local currency CRC. If the inactive entity has data to report in different currencies, it must apply the sale exchange rate established by Central Bank of Costa Rica as to the date of the transaction.
The Resolution entered into force after its publication in the Official Gazette.
For additional information with respect to this Alert, please contact the following:
Ernst & Young, S.A., San José, Costa Rica
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific