On March 17, 2020, the Costa Rican Congress approved the COVID-19 Tax Relief Law, which provided several tax measures intended to mitigate the effects of the outbreak in the local economy. Regulation and a General Resolution were also issued to regulate those measures.

Among the main actions taken are:

• Deferral on the payment of Value Added Tax
• Partial payment deferral (installments Income Tax)
• Deferral of the payment of Selective Consumption Tax
• Deferral of payment of customs duties

The deferral applies in all cases during April, May, and June 2020. The obligation to file tax returns remains unaltered, and the corresponding payment can be postponed until December 31, 2020, with no application of interest or penalties.

In all cases, the tax must be paid in full by December 31, 2020, and no interest or penalties apply.

Payment facilities may be requested to the Tax Authority and/or the Customs Office as long as certain requirements are met, including the payment of a premium of 20% of the amount owed.

In the absence of payment facilities, the taxpayer must pay all full taxes that he/she did not pay on December 31, 2020. In case of not doing so, interest and penalties will apply as of January 1, 2021.

Regarding Value Added Tax, partial payments, and the Selective Consumption Tax, the request for the payment facilities must be submitted no later than October 15, 2020. It must be approved before December 31, 2020. Concerning customs duties, there is no specific deadline for filing the request. However, the payment facilities must be approved before December 31, 2020, to avoid interest and penalties.

Dentons Muñoz remains at the forefront of regulatory developments in this field and its implementation by the competent authorities. For assistance and information on the scope and implications of these regulations, as well as assistance obtaining the payment facilities, please feel free to contact the experts at our Tax Department at your convenience.