Failure to report income from business operations or from professional services rendered through self-employment activities in Costa Rica could result in up to $80K in penalties. Not all business owners or self-employed professionals are potentially affected by this fine; only those who acquired goods up to $5K in value or who rendered a professional service worth more than $100 throughout the tax year.

Through a series of announcements, the General Directorate of Revenue (Spanish initials: DGT) has explained that taxpayers in Costa Rica have until December 1^st to declare their income and expenditures, but only about 25 percent had done so on November 25^th. Late or morose declarations could result in fines that start at about $8K all the way to two percent of gross income, not to exceed 100 median salaries, which is how the maximum $80K penalty is calculated.

It is important to remember that the filing requirements above are only for those who fall under certain tax brackets reported by The Costa Rica Star last December:

Wage earners, self-employed professionals and businesspeople in Costa Rica who earn more than 752,000 colones (about $1,504) per month will be subject to withholding by the national revenue collection authority in 2014. Such is the Executive Decree issued by the Presidential Office in early October 2013. Workers who earn less than 752,000 colones per month in 2014 will be exempt from income tax obligations.

Most workers in Costa Rica earn below 752,000 per month and are thus exempt from these filings.

Another potential penalty that may apply to taxpayers in Costa Rica is for failure to declare general income, known as impuesto sobre la renta, which affects more than 560,000 earners who fall under the tax brackets above. These taxpayers have until December 15^th to file their declarations and pay any taxes due. Failure to do so could result in a fine of $400 plus interest on the amount of tax due.

The tax filing and declaration system in Costa Rica is largely an online process. To this effect, the DGT servers tend to crash on December 1^st and December 15^th as a massive rush of late-minute filers attempt to submit their declarations at once.