Publication of the Regulations for Telework in Costa Rica
On December 20, 2019, the Regulations for Telework were published in the Official Journal La Gaceta by Executive Decree No. 42083-MP-MTSS-MIDEPLAN-MICITT; this comes as a product of the publication of Law No. 9738, on September 30, 2019, entitled “Law to Regulate Telework”, which aims to promote, regulate and implement Telework as an instrument for the generation of employment and modernization of public and private organizations, through the use of information and communication technologies.
Private enterprises have a period of six months to comply with the above-stated regulation, whereas in the public sector, the administrative authorities responsible for Labor Rights and Social Security will have three months to carry out such adequacy.
Formalization of the National Business Policy 2030
Executive Decree No. 42079 of the Ministry of Economics, Industry and Commerce (MEIC) formalized and declared the National Business Policy 2030 of public interest; it’s an instrument of public policy with the aim of generating better opportunities for the Costa Rican people by recognizing and promoting their talent, improving the competitive positioning of entrepreneurship and boosting the growth of Costa Rican companies, thus generating employment and economic development.
It focuses on the idea of a “national ecosystem”, which promotes an entrepreneurial and innovative attitude, enhances an environment for business development and defines the financial and management tools that conduct Costa Rican companies to reach a better positioning in national and international markets. Some of its fundamental pillars are the following: institutional articulation, creating a systemic vision of the model of government; sustainability, seeking to harness and take care of natural resources, and the inclusion of the entire national territory.
Thus, this public policy seeks to unite the different sectors of the country, in order to achieve as a whole the planning and execution of actions that takes Costa Rica forward; to this end, emphasis is placed on a unitary view of the national scenario, the responsible use of resources, and the distribution of roles and tasks, in order to gain collective well-being.
Compulsory registration of inactive companies with no lucrative activity
Resolution No. DGT-R-075-2019 of December 12 2019 states the following:
“Article 1—Duty of Registration. Inactive legal persons domiciled in the country (Costa Rica) that don’t carry out lucrative activity from Costa Rican sources shall be registered at the Registro Único Tributario (Single Tax Record) of the General Tax Administration with the updated data for legal representative and tax domicile, with the economic activity code “960113 personas jurídicas constituidas en el país que no desarrollan actividad económica de fuente costarricense“. For these purposes, they must use the digital platform called Administración Tributaria Virtual, or Virtual Tax Administration (ATV), available on the website www.hacienda.go.cr. Those that at the time of validity of this resolution are already registered with the information for the legal representative and tax domicile, will be assigned the said activity officiously”
This means that legal persons that are not already properly registered in the Single Tax Record (those that have not completed information regarding their legal representative, physical address, email address, amongst others) are required to fill out the Form D-140, where such information must be established. If the requirement is not met within the prescribed time limits, legal persons are exposed to a heavy financial penalty.
New Regulations of Enterprises fo the Federate College of Engineers and Architects
The General Board of Directors of the Federated College of Engineers and Architects of Costa Rica (CFIA) issued the REGULATION OF COMPANIES, with the goal of regulating the obligations companies that provide engineering and architecture services in the country must have; “Empresa” (Enterprise) refers to any economic unit formed in an entity, in accordance to Costa Rican legislation, which has among its purposes the regulation of construction or consulting in the fields of engineering or architecture.
In order to meet these requirements, both domestic and foreign Enterprises must comply with the solicited by the CFIA. Thus, prior to the registration process with the CFIA, it’s necessary to register the companies before the Commercial Section of the Register of Legal Persons of the National Registry of Costa Rica; Enterprises must also present, either through physical or digital means established by the CFIA:
- a) Enterprise Enrollment Form duly signed by the legal representative and responsible professionals.
- b) Valid Legal Status from the National Register, with no more than fifteen days of issuance.
- c) Proof of cancellation of the amount corresponding to the registration and annuity rights.
- d) In the case of an SME, current certification issued by the Ministry of Economics, Industry and Commerce (MEIC) shall be provided.
The procedure can be done digitally or in person, under the following conditions:
- Personally at the CFIA: the legal representative and the responsible professionals must report to the CFIA, with their respective I.D.’s, in force and in good condition, for verification by the official. If a person is not presented, their signature must be authenticated by a notary public.
- Digital: the legal representative and professionals must sign through digital signature, otherwise, the handwritten signatures must be authenticated by notary public.
Moratorium on the application of sanctions for non-compliance with the delivery of information for the Transparency Register of Final Beneficiaries
Law No. 9416 of December 14, 2016, entitled “Law to Improve the Fight Against Tax Fraud”, provides, on its second chapter, the creation of the Register of Transparency and Final Beneficiaries of legal persons, as well as the obligation to provide information by the person legally responsible. This law seeks to exercise strict control over the application and compliance of the Register of Transparency and Final Beneficiaries.
Nevertheless, compliance with the law has been difficult for the legal representatives of legal persons, due to a number of reasons; for instance:
- The complexity and dynamics established for the supply of information.
- The lack of assistance for those obliged, where information and training tools can be provided to satisfactorily comply with the new legal obligations entrusted.
- The lack of necessary knowledge of the legal representatives of companies to comply with the established dynamics. While such representatives are considered as those responsible for the provision of information, they do not necessarily have the skills or academic ease to access and use the system, with the aggravation that there’s no optimal assistance on behalf of tax authorities that ease fulfilling their new responsibilities.
- Complications with the digital signature certification process.
In order to face such difficulties, Costa Rican deputies sought with Bill No. 21.758 to establish a three-month moratorium on the application of the sanctions laid down, giving the representatives of legal persons a reasonable period of time so that they can receive necessary preparation to provide the due information to the Registry, and yielding a period of natural adaptation before a new legal procedure, without turning into implied penalties.
On the afternoon of 29 January 2020, the draft was approved, which means that the first two months will not be subject to the sanctions provided for in Article 84a of the Code of Tax Rules and Procedures. From the third month on, non-compliance companies will face the payment of 50% of the financial penalties.
Note: The purpose of this publication is to provide general information about the new regulations governing companies in Costa Rica, and is not intended to be legal advice as such. In the case of requiring more specific information regarding these issues, please do not hesitate to contact any of our lawyers.
