Costa Rica has published Law No. 10491 titled “Law to Facilitate the Regularisation of the Tax Condition in Support of Formality and the Reactivation of the Economy,” in the official gazette on Monday, 19 August 2024. The Law went into force on the same day.
The law modifies and extends benefits to temporarily replace the business closure penalty and ease value-added tax (VAT) payments for sectors adversely affected by health restrictions.
Provisions of the legislation
- The law permits replacing the business closure penalty with a monetary fine. These are:
- three base salaries for large taxpayers (CRC 1,386,600);
- 25% of the base salary for other taxpayers (CRC 115,550).
- This substitution applies to completed processes, those undergoing notification, and those initiated before 31 March 2022. The tax administration must archive the procedures related to business closure penalties if the process was initiated before 31 March 2022.
- The law permits taxpayers to request to settle VAT debts associated with tax periods before March 2022 in installment payments, provided the tax returns were filed before 16 April 2022.
To be eligible for these benefits, taxpayers must fulfill both material and formal obligations. If choosing the business closure penalty replacement, a three-month window is provided to meet these obligations.
For VAT installments, any outstanding debt not covered by the installments must be settled by the taxpayer.