The General Directorate of Revenue (DGT) has announced that tax dodgers in Costa Rica will face stiff penalties if they do not accurately report their income. In fact, individuals who fail to report income from self-employment or from business operations could face up to $80,000 in penalties. It should be noted that not all self-employed individuals or business owners will be affected by the fine. Only those individuals who rendered professional services with a value of more than $100 or those who acquired goods with a value up to $5,000 will be affected.
Tax payers in Costa Rica must declare their income and expenditures by December 1st. According to the General Directorate of Revenue, only about 25 percent had done that by the end of November last year. Business owners or self-employed individuals who make late decorations may face fines beginning at $8,000, but could reach as much as two percent of their total gross income.
Self-employed individuals, business owners, and wage earners in Costa Rica earning more than about $1,500 per month were subject to the national revenue collection authority withholding last year. Workers earning less than this amount last year are exempt from income tax obligations. Due to the fact that most people in Costa Rica earn less than this amount, they are exempt from such required filings.
Other Tax Penalties in Costa Rica
Taxpayers in Costa Rica could also face a penalty known as impuesto sobre la renta, which is a failure to declare general income. This requirement affects more than half a million wage earners in Costa Rica. Taxpayers affected by this filing requirement have until December 15th to file and pay their taxes. Wage earners who fail to do so could face a fine of $400 in additional to interest.
The good news is that the tax filing process is primarily online in Costa Rica, making it easier for wage earners to handle their tax filing and declarations. It should be noted; however, that many people wait until the last minute and as a result, it is not uncommon for the DGT servers to crash in December.