The General Directorate of Taxation of Costa Rica issued Resolution MH-DGT-RES-0015-2026, establishing new interpretative criteria regarding the application of the International Financial Reporting Standards (IFRS) and IFRS for SMEs for tax purposes. The regulation will enter into force on January 1, 2027, and will replace the resolution in effect since 2018.
The measure seeks to align tax regulations with international financial reporting standards, strengthen tax oversight processes, and provide greater legal certainty to taxpayers regarding the tax treatment of various accounting items.
Large taxpayers must apply full IFRS
The resolution establishes that taxpayers formally classified as Large National Taxpayers must maintain their accounting records under full IFRS for tax compliance and tax audit purposes.
Other taxpayers may choose between applying full IFRS or IFRS for SMEs, depending on their corporate and regulatory needs.
However, the General Directorate of Taxation emphasizes that the application of international accounting standards does not modify existing tax legislation. In the event of a conflict, tax provisions will prevail.
Additionally, the resolution excludes taxpayers registered under the Simplified Tax Regime and the Special Agricultural Regime from its scope.
Increased traceability and supporting documentation requirements
The resolution also strengthens documentation and tax reconciliation requirements. Specifically, it provides that:
- Adjustments made for tax reconciliation purposes must be properly supported with documentation.
- The Tax Administration may request specific financial information during tax audit procedures.
- Failure to provide the required information may result in penalties and fines.
- Taxpayers must retain sufficient evidence regarding accounting records, adjustments, and applied criteria.
The resolution also reinforces the use of tax reconciliation based on IAS 12 or Section 29 of IFRS for SMEs, as applicable.
Impact on inventories, assets, and corporate transactions
The interpretative criteria establish specific rules for several accounting and tax matters, including:
- Inventories and losses arising from theft, destruction, or self-consumption.
- Depreciation and impairment of assets.
- Intangible assets.
- Construction contracts.
- Biological assets.
- Investment properties.
- Business combinations.
- Borrowing costs and financing-related expenses.
The Tax Administration clarifies that asset revaluations and impairment losses will not be deductible for tax purposes, while certain financing expenses must be capitalized and may not be immediately deducted. In addition, inventory losses must be supported by technical documentation and sufficient evidence, and the transfer of certain intangible assets may trigger VAT implications.
What should companies do before the resolution becomes effective?
Although the resolution is presented as an interpretative criterion, in practice it increases the level of detail expected by the Tax Administration regarding financial information and tax reconciliation processes. Companies operating in Costa Rica should proactively assess:
- Their depreciation and capitalization policies.
- Supporting documentation for accounting adjustments.
- The tax treatment of intangible assets and investments.
- Their tax reconciliation processes.
- Consistency between financial statements, accounting records, and tax filings.
The delayed entry into force until 2027 provides companies with an opportunity to review accounting structures, strengthen internal controls, and adjust tax criteria before potential tax audit procedures arise.
