Costa Rica attempts to collect taxes from companies that have reported losses

Authorities in Costa Rica seek to collect about $1 billion in taxes from large companies that reported losses between 2012 and 2017, the government said Wednesday.

The Minister of Finance, Rocío Aguilar, presented at a press conference a list of 96 companies considered “large taxpayers” who stopped paying taxes in one or several years of the period analyzed after declaring zero profits or losses.

“The level of tax evasion is high, and we have an interest in reducing it as much as possible to close that tax gap and, thereby, reduce the deficit that afflicts the administration,” Aguilar said at a press conference.

He was alluding to the projected fiscal deficit of 7.2% of the gross domestic product (GDP) for this year. The Legislative Assembly approved this week a tax reform that seeks to contain that shortcoming.

The evaluated companies represent nearly 20% of the 462 considered as “large taxpayers” in Costa Rica for presenting annual revenues of around $70 million.

Aguilar admitted that it is not possible to determine if there was evasion of taxes in all the cases evaluated and that it is possible that some of the companies legitimately had losses during the analyzed period.

One of these companies, the Florida Ice and Farm Company (FIFCO), which owns the country’s main brewery, appears on the list disclosed by the Treasury but said in a statement that it is “up-to-date in the declaration and payment of taxes.”

FIFCO explained that it appeared on the list because some of its subsidiaries do not sell products or services and only own shares, for which they do not report profits.

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