Code of Tax Norms and Procedures (Law No. 4755) — rights and duties regarding the Ministry of Hacienda, statute of limitations, fines, and appeals

The Code of Tax Norms and Procedures (Law No. 4755, of 1971), known as the Tax Code, is the general law that governs the relationship between any taxpayer and the Tax Administration (Ministerio de Hacienda) in Costa Rica: what duties a taxpayer has, how long the Ministerio de Hacienda has to collect a debt, what happens if you are audited, and how to file a claim. It applies to all taxes unless a special law provides otherwise. For details on a specific tax (Income, IVA) see the guides dedicated to those laws and procedures.

Formal duties of the taxpayer (Article 128): to register in the corresponding records and report any changes, to file the declarations that correspond, to keep the books and records required, to orderly maintain documents of your operations, to give facilities to tax officials for inspections, to communicate the change of tax domicile, and to appear before the Tax Administration when required.

Statute of limitations for tax debts (Articles 51-53) — how long the Ministerio de Hacienda has to collect: the action of the Tax Administration to determine an obligation and demand payment expires after 3 years. This term is extended to 5 years if the taxpayer is not registered with the Ministerio de Hacienda, or if they filed declarations classified as fraudulent, or if they did not file the corresponding sworn declarations. The term is counted from January 1 of the year following that in which the tax was due to be paid, and it is interrupted (starts again from zero) if the Ministerio de Hacienda notifies the start of an audit, if the taxpayer acknowledges the debt, if they request a payment arrangement, or if they are notified of a collection action.

What happens if the Ministerio de Hacienda audits you — the "statement of charges" (Articles 144-146): before determining a debt, the Ministerio de Hacienda must notify in writing to the taxpayer the observations or charges formulated ("statement of charges or observations"), giving an opportunity to regularize. The taxpayer has 30 days from that notification to dispute in writing, presenting arguments and evidence — once that period passes without disputing, no further appeal is possible against those charges. The taxpayer can also pay "under protest" the amount demanded without that being considered an acceptance of the facts, and still dispute afterwards; if the claim is won, the Ministerio de Hacienda must return what was paid with interest. The Ministerio de Hacienda must resolve the claim within 3 months following the expiration of the dispute period (or from receipt of the evidence, if presented outside the deadline).

Appeal before the Tax Administrative Tribunal (Article 156): against the resolution of the Ministerio de Hacienda that determines a debt, the taxpayer may appeal before the Tribunal Fiscal Administrativo within the following 15 working days of the notification. It is a tribunal independent of the Ministerio de Hacienda, specialized in tax matters.

Most common fines (Articles 78-80 bis): failing to file on time the registration, modification, or deregistration declaration with the Ministerio de Hacienda costs 50% of a base salary for each month of delay (cap 3 base salaries); failing to file on time a self-assessment declaration (for example Income or IVA) costs a fixed fine of 50% of a base salary; paying a tax after the deadline (whether determined by the taxpayer themselves or the Ministerio de Hacienda) generates a 1% monthly surcharge on the amount owed, with a cap of 20% of the amount. The right of the Ministerio de Hacienda to apply these sanctions expires in 4 years (Article 74).

Notifications (Article 137): the Ministerio de Hacienda may notify personally, by mail or electronic means, by letter delivered by an official, or via an edict in the Diario Oficial if the domicile of the interested party is unknown — in this latter case it is considered notified from the third working day after publication.

Note: this guide summarizes the protection mechanisms and the most consulted deadlines of an extensive and heavily reformed law (more than 190 articles, it also includes the criminal regime for tax crimes such as tax fraud, not covered here). For a real case of audit or collection by the Ministerio de Hacienda, the recommended course is to consult a certified public accountant or a lawyer specialized in tax law within the indicated deadlines, since letting them expire causes the loss of the right to claim.