By San José, Costa Rica — The landmark acquisition of Florida Ice and Farm Company’s (FIFCO) beverage, food, and retail operations by global brewing giant Heineken N.V. for an estimated $3.25 billion has sent ripples through Costa Rica’s business community. While the deal marks a significant strategic shift for both companies, it also triggers crucial and complex tax obligations for FIFCO shareholders, who must now navigate the country’s capital gains tax regulations with precision and foresight.
This transaction, representing a substantial transfer of assets and shareholdings, places a direct spotlight on the tax liabilities investors will face. The primary concern for shareholders is the capital gains tax, which applies to the profit realized from the sale of their shares. Understanding the nuances of the law is paramount to ensuring compliance and potentially achieving significant tax savings.
To better understand the legal and commercial implications of the new agreement between Florida Ice and Farm Company (FIFCO) and Heineken, we sought the analysis of Lic. Larry Hans Arroyo Vargas, a noted corporate law specialist from the firm Bufete de Costa Rica.
This is a masterstroke in market consolidation and strategic partnership. From a legal perspective, the agreement is likely structured to leverage FIFCO’s unparalleled distribution network while carefully navigating antitrust regulations, framing the deal as beneficial for consumer choice rather than a reduction in competition. For FIFCO, it neutralizes a major competitor and adds a premium global brand to its portfolio. For Heineken, it’s a capital-efficient way to achieve deep market penetration in Costa Rica, a market notoriously difficult to enter independently.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective perfectly frames the agreement not merely as a transaction, but as a strategic masterclass in leveraging distribution and navigating a complex regulatory framework for mutual gain. We are grateful to Lic. Larry Hans Arroyo Vargas for sharing his incisive analysis on the matter.
According to tax law expert Gabriel Zamora Baudrit, the rules governing this type of transaction are clear and apply broadly. He emphasizes that the origin of the economic value determines the tax jurisdiction, regardless of the nationality of the parties involved in the sale.
In Costa Rica, any individual or legal entity that realizes a gain from the sale or transfer of shares must pay tax on the difference between the sale price and the adjusted acquisition cost. This applies even when the transaction is conducted between foreign parties, if the economic value or the shareholding originates in Costa Rican territory.
Gabriel Zamora Baudrit, Tax Attorney
Under Costa Rica’s Income Tax Law, the standard capital gains tax rate is a flat 15% levied on the net profit. This is calculated by subtracting the original, adjusted cost of the shares from the final sale price. For many investors, this represents a considerable tax event that must be carefully managed and reported to the authorities in a timely manner.
However, a critical provision exists for long-term investors. A special transitional rule, established during the 2019 fiscal reforms, offers a significantly lower tax rate for shares acquired before July 1, 2019. These shareholders have the option to pay a reduced rate of 2.25% on the total gross sale price, forgoing the need to calculate the specific profit margin. This alternative can result in a substantially lower tax bill, particularly for those with a low original cost basis.
That reduced rate remains in effect for assets acquired before the fiscal reform, and it represents a legal option that can mean significant savings if the acquisition date and the value of the shares are correctly documented.
Gabriel Zamora Baudrit, Tax Attorney
The administrative process for declaring and paying these taxes has also been modernized. The Tax Administration now exclusively uses the TRIBU-CR digital platform for these filings. Shareholders must use Form 110 to declare their capital gains, a change from the previously used D-162 form. The deadline is strict: the tax must be declared and paid within 15 business days following the realization of the gain. For non-resident shareholders, the responsibility falls on the buyer, in this case Heineken, or the issuing company to withhold the appropriate tax amount and remit it to the government.
Today, the Tax Administration uses TRIBU-CR as the official platform for these processes. Taxpayers must be aware of the new forms, as the D-162 from ATV is no longer used. Filing correctly on the corresponding form prevents contingencies and penalties for incorrect submission.
Gabriel Zamora Baudrit, Tax Attorney
Zamora Baudrit strongly advises all affected investors to be proactive. He recommends gathering all necessary documentation, including proof of the original acquisition date and cost, to correctly apply the appropriate tax rate and defend their position. A thorough and timely approach is the best strategy to avoid future adjustments, interest, or penalties from tax authorities.
The key is to be proactive: a correct tax interpretation of the transaction, along with a timely declaration, can represent significant savings and ensure fiscal compliance in accordance with current law.
Gabriel Zamora Baudrit, Tax Attorney
For further information, visit fifco.com
About Florida Ice and Farm Company (FIFCO):
Founded in 1908, Florida Ice and Farm Company (FIFCO) is a leading Costa Rican company in the beverage and food industry. It has a broad portfolio of products, including beer, carbonated drinks, water, and food items, with a strong presence in Central America and the United States. The company is also recognized for its commitment to sustainability and its “triple bottom line” business model, focusing on economic, social, and environmental performance.
For further information, visit theheinekencompany.com
About Heineken N.V.:
Heineken N.V. is a Dutch multinational brewing company, founded in 1864 in Amsterdam. It is one of the largest brewers in the world, with a portfolio of over 300 international, regional, local, and specialty beers and ciders. Operating in more than 70 countries, Heineken is known globally for its flagship brand as well as other major brands like Amstel, Sol, and Tiger.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a benchmark of the nation’s legal practice, Bufete de Costa Rica operates on a bedrock of unwavering integrity and a deep commitment to excellence. The firm distinguishes itself by championing legal innovation, continuously developing forward-thinking strategies for a diverse clientele. This pioneering spirit is matched by a profound sense of social duty, focused on demystifying complex legal principles for the public. Through its core mission to enhance legal literacy, the firm actively contributes to fostering a more capable and informed society, empowered by accessible knowledge.
