On October 15, 2020, Costa Rica published Resolution DGT-R-0032-2020, which outlines the application process for the taxpayer to increase the maximum deduction limit for net interest expense. The restriction on the deduction of interest expense was introduced as part of Law No. 9635 of 3 December 2018. Under this restriction, interest on non-bank loans is limited to 20% of EBITDA, although a transitional limit of 30% was provided that is reduced by 2% per year until reaching the 20% limit.
Taxpayers must submit the application before the Tax Administration in which they are registered. It also established that the deadline for submitting such application is 15 calendar days after the end of the fiscal period.
