Costa Rica: New law amends, extends VAT late payment relief and business closure procedures

Law No. 10491—known in English as the “Law to Facilitate the Regularization of the Tax Condition in Support of Formality and the Reactivation of the Economy”—was published in the official gazette and became effective on August 19, 2024.

The law amends and extends benefits that aimed to temporarily substitute the business closure penalty and facilitate value added tax (VAT) payments for sectors severely impacted by health restrictions.

• The law provides for the temporary replacement of the business closure penalty with a monetary penalty—three base salaries for large taxpayers (₡1.386.600) and 25% of the base salary for other taxpayers (₡115.550). This substitution applies to completed processes, those in the process of notification, and those initiated before March 31, 2022.
• The tax administration is required to archive the sanctioning procedures for business closure, provided that the process has started before March 31, 2022.
• The law also allows taxpayers to request payment installments for VAT debts related to tax periods incurred before March 2022, provided the tax returns were submitted before April 16, 2022.

To qualify for these benefits, taxpayers must be current with their material and formal obligations. If opting for the business closure penalty replacement, a three-month period is granted to meet obligations. For VAT installments, any debt not included in the installments must be paid by the taxpayer.
 

For more information, contact a KPMG tax professional in Costa Rica:

Cristina Sansonetti | acsansonetti@kpmg.com

Sergio García | sgarcia1@kpmg.com

Carmen Sánchez | carmensanchez1@kpmg.com