Costa Rica

Transfer Pricing in Costa Rica, regulations and formal obligations required by the General Directorate of Taxation (DGT)

Since September 13, 2013, Costa Rican taxpayers are obliged to declare and value their operations with both domestic and foreign related parties and those classified as large taxpayers or large territorial companies, or that are persons or entities under the free zone regime, through the Informative Declaration of transfer pricing, as established by Decree No. 37898-H , published by the General Directorate of Taxation (DGT). The transfer pricing rules are supplemented by the DGT-R-44-2016, amending Article 4 of this regulation by the DGT-R-28-2017.

In May 2018, Resolution DGT-R-25-2018 came into force, which regulates the implementation of the BEPS and the OECD. In 2019 Resolution DGT-R-49-2019 (repealing Resolution DGT-R-16-2017) establishes the documentation of Transfer Pricing Studies.

Obligated subjects

Costa Rican taxpayers must file the information return with the General Directorate of Taxation on an annual basis. Obligated taxpayers are those who carry out operations with related or cross-border companies and that separately or jointly exceed the amount of 10,000 base salaries. (US$ 7.6 MM) or that are classified as large national taxpayers or large territorial companies or that are under the free zone regime. Likewise, Resolution No. DGT-R-001-2018 of January 11, 2018, established the obligation to submit the Country by Country Report to all parent companies resident in the country whose overall income amounts to more than 750 million euros.

Formal obligations

Article 9 of the Transfer Pricing Decree in Costa Rica mentions in its first paragraph that the supporting documentation or technical study of Transfer Pricing must be available to the Tax Administration in order to validate compliance with the Principle of Full Competition. This documentation should be available for the correct completion of the Information Statement, which would be submitted on the last day of June.

Penalties for non-compliance

Penalties for non-compliance amount to 2% of income for the previous year with a minimum range of 10 base salaries and up to a maximum of 100 base salaries. In its US dollar equivalent it would be approximately US$ 7,000 to US$ 70,000.