Costa Rica: Tax compliance obligations for dissolved entities
Dissolved legal entities required to file annual inactive entity tax return under Form D195
Dissolved legal entities required to file annual inactive entity tax return
According to the Costa Rican tax authorities, a legal entity that is dissolved must fulfil existing annual tax compliance obligations for inactive companies. The tax authorities recently created internal code number 960113 for inactive entities—used by the tax authorities to classify all inactive entities, including legal entities in dissolution status, which must fulfil the annual tax compliance obligations in place for inactive entities.
To comply with the annual tax filing obligations, a dissolved entity will be required to appoint a legal representative with sufficient authority to conduct this assignment annually. Therefore, dissolved legal entities are required to at least file the annual inactive entity tax return under Form D195, and calculate and pay the corresponding penalties (when applicable).
Background
Costa Rican legal entities may dissolve for different reasons. The most frequent dissolution motives are:
- Shareholders agreement
- Termination of its corporate term
- Dissolution of the entity based on Law 9428 (the lack of payment of the annual corporate flat tax for three consecutive years)
An entity that is dissolved is not considered a conclusively terminated (or liquidated) entity.
Read an October 2023 report (Spanish and English) [PDF 511 KB] prepared by the KPMG member firm in Costa Rica
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.