Friday, 4 December 2020

Corporation Tax Law Void AB Initio

OLYMPUS DIGITAL CAMERA[OP-ED] I have said for some time now, that the actions of the Sala IV, the Constitutional, or Supreme Court of Costa Rica, are more akin to it being a political arm of the Executive Branch of Government, rather than a true legal body, making decisions based on law.

The recent decision by the Sala IV, voiding the Corporation Tax law as unconstitutional, exemplifies my previous thoughts on this subject.

As I understand the decision, the existing Corporation Tax law was found to be unconstitutional, as not having the appropriate notice of its passage entered in the official Government publications for such notifications, La Gaceta. If this is the finding of the Court, then the law is void “ab initio” (from the beginning) and all tax revenue collected to date by the Government, has been collected illegally, and ought be returned to the taxpayers who paid it. Now we know that is not going to happen, because we also know that the Costa Rica Government coffers are essentially empty and that such a return of funds would be next to impossible to make.

- Advertisement -

In making its decision, the Court, for what in my opinion is a purely political, not legal, decision, stated in its finding that the Corporation Tax law was unconstitutional, that its decision would not come into effect until 2016. Hence, there will be no interruption in collecting the 2015 Corporation Tax, funds that the Government is desperately relying on. This provision of delaying the implementation of the Court’s decision is not a decision based in law, where the law is found to be unconstitutional from its inception (void ab initio) and in my opinion, it is a totally unenforceable provision of the Court’s decision on the subject. However, as the decision was made by the highest Court in the land, there is no other legal body to Appeal to, except to ask that its decision be reviewed as to its legality by itself. I think we all know where that’s headed.


In addition and in further consideration of the political nature of the Court’s decision in this matter, it is somewhat, if not highly suspicious, that the decision was rendered by the Court three days prior to the end of the current 2015 Corporation Tax collection period, being the end of the month of January.

Clearly, this decision was rendered by the Court to allow the Government to re-plant the Corporation Tax law in the correct format as to notification in La Gaceta, to allow this tax revenue collection stream to continue uninterrupted in 2016, while providing for its continued illegal collection in 2015.

- Advertisement -

Questionable Court decisions such as this, do not instill confidence, particularly in the business community of the Country, and can have nothing but a detrimental effect on Costa Rica in its status as a Developing Nation.

- Advertisement -
Richard Philps
Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose. Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking. To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney; Email:, Website:

Related Articles

Most Costa Ricans feel insecure, yet very few invest to protect themselves

QCOSTARICA - A study carried out by the National University (UNA)...

“Wonder Woman” is ready to wreak havoc in Costa Rican cinemas

QMAGAZINE - The fever for Wonder Woman begins to heat up...


minimize the risks of contagion of covid-19 this end of the year

QCOSTARICA - You cannot cover the sun with one finger and look the other way: there will be get-togethers and parties this end of...

Bill would allow invasive tracking with facial recognition

QCOSTARICA - Advancing in the Legislative Assembly, a bill that proposes an invasive tracking of inhabitants of Costa Rica through facial recognition and other...

Medical Devices: New Investment in Costa Rica

QCOSTARICA - The California based company, Nevro Corp, plans to invest between 2020 and 2023 US$21 million in the commissioning of an industrial plant...

Most Costa Ricans feel insecure, yet very few invest to protect themselves

QCOSTARICA - A study carried out by the National University (UNA) showed that the majority in Costa Rica believe that they live in a...

Costa Rica government spends more on wages than the average of any region in the world

QCOSTARICA - It has been said over and over that Costa Rica is the Switzerland of Central America. But when the two are compaired,...

Low-cost airline Wingo resumes flights between Bogotá and San José de Costa Rica

QCOSTARICA TRAVEL - Wingo, the Colombian-flag low-cost airline, announced that it will resume its direct flights between Bogotá (BOG) and San José (SJO), with...

Let's Keep This Going!

To be updated with all the latest news and information about Costa Rica and Latin America.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.