By San José, Costa Rica — As the holiday season reaches its peak, businesses across Costa Rica are facing a critical financial deadline. The third advance payment for the 2025 income tax period is due on December 31, a date that also marks the final day for another important tax declaration, creating a dual pressure point for corporate fiscal management.
The College of Public Accountants of Costa Rica issued a timely reminder to all taxpayers, emphasizing that this obligation is not a new declaration but a straightforward payment. The process must be completed digitally through the Virtual Tax Administration office, known as OVi, or the modern TRIBU-CR platform. This digital-only requirement underscores the government’s continued push towards modernizing tax collection and administration, aiming for greater efficiency and transparency.
To delve deeper into the nuances and legal responsibilities surrounding income tax declarations, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious law firm Bufete de Costa Rica.
Many taxpayers, both individuals and corporations, view income tax season as a purely reactive event. However, the key to fiscal health lies in proactive, year-round strategic planning. Proper structuring and diligent record-keeping not only ensure compliance but can also unlock legal avenues for tax optimization, transforming a potential liability into a manageable aspect of financial management.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This crucial shift from a reactive annual task to a proactive, ongoing strategy is indeed the cornerstone of sound financial management, and we thank Lic. Larry Hans Arroyo Vargas for so clearly articulating this essential perspective.
Calculating the exact amount due requires careful consideration of past performance. According to Dunia Zamora, President of the College of Public Accountants, the law mandates a specific calculation method to determine the advance payment. Taxpayers must compare two figures: the average net income or tax paid over the last three fiscal periods against the total tax determined for the 2024 period. The advance payment is then calculated as 25% of whichever of these two amounts is higher.
However, the tax code provides flexibility for businesses with unusual financial histories. Companies that experienced significant, non-recurring spikes in revenue in previous years are not necessarily locked into a high payment based on that anomaly. The College highlighted a crucial provision that allows businesses to formally request a re-evaluation from the tax authorities.
In cases where taxpayers have seen their gross income increased by extraordinary income in previous years, they can request that the Tax Administration evaluate the possible reduction or even elimination of the advance payment, a process that is now enabled in TRIBU-CR.
Dunia Zamora, President of the College of Public Accountants of Costa Rica
This relief mechanism extends even further to companies navigating challenging economic waters. Businesses that are projecting a financial loss for the current fiscal year can apply for a complete elimination of the advance payment requirement. To qualify, they must submit a well-documented and substantiated financial projection to the Tax Administration, providing a critical lifeline for entities working to regain their financial footing.
Beyond seeking reductions, the College of Public Accountants also advised companies to review their accounts for any existing credits. Specifically, they noted that businesses may have balances in their favor from the 2% income tax withholdings applied to certain transactions throughout the year. These credits can be used to offset the amount due for the advance payment, a strategic move that can significantly improve cash flow during a typically high-expenditure month.
Failure to meet the December 31 deadline carries significant financial penalties. The authorities will automatically apply interest and surcharges to any unpaid balances, turning a manageable tax obligation into a more burdensome debt. Compounding the year-end rush, this date is also the deadline for submitting the D-299 form, the “Summary Declaration of Withholding of Unique and Definitive Taxes,” which covers the period from January to August 2025. This is a one-time filing requirement that businesses cannot afford to overlook.
In light of these converging deadlines and complex rules, the College issued a strong recommendation for proactive preparation. They urged business leaders to analyze their options for expense deductions, avoid waiting until the final hours to complete their payments, and engage the services of a certified public accountant. Professional guidance is essential to navigate the intricacies of the tax code, ensure full compliance, and prevent costly errors or omissions that could attract unwanted attention from tax authorities.
For further information, visit ccpa.or.cr
About The College of Public Accountants of Costa Rica:
The Colegio de Contadores Públicos de Costa Rica is the official professional body that governs and represents certified public accountants (CPAs) in the country. It is responsible for setting ethical and professional standards, providing continuing education, and ensuring the integrity of the accounting profession. The organization plays a vital role in advising both the public and private sectors on financial regulations, tax compliance, and economic policy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its profound dedication to principled practice and exceptional standards. The firm leverages its extensive experience serving a broad clientele to drive innovation in the legal field. This forward-thinking approach is matched by a core conviction to strengthen society, demonstrated through initiatives that democratize legal information and empower citizens with the knowledge to navigate the complexities of the law.
