Costa Rica | Corporate Income Tax: How to Apply for a Fiscal Period Change

María Elena Mora, Associate at ARIAS Costa Rica and an expert in Tax Law practice, presents this article on changing the fiscal period for Corporate Income Tax. The Corporate Income Tax ("CIT”) constitutes a central component of the Costa Rican tax system, levying tax on income earned by individuals and legal entities derived from economic activities carried out within the national territory. In this context, the proper determination of the fiscal period is essential to ensure that the tax return accurately reflects the taxpayer’s economic reality. As a general rule, the ordinary fiscal period for the CIT runs from January 1 to December 31, pursuant to Article 4 of the Income Tax Law. However, certain economic activities, international corporate structures, or operational cycles may create mismatches between the calendar year and the taxpayer’s actual financial cycle. In such cases, the applicable regulations, particularly the Regulations to the Income Tax Law and Resolution MH-DGT-RES-0015-2025, provide for the possibility of requesting authorization for a special fiscal period. This article analyzes the applicable legal framework, the eligibility requirements, and the main practical considerations for its adoption. Legal Framework The legal basis for adopting special fiscal periods for CIT purposes is primarily found in three instruments: Law number 7092 ( Income Tax Law), its Regulations, and Resolution MH-DGT-RES-0015-2025, issued by the General Directorate of Tax Administration, which currently governs this procedure. Income Tax Law Article 4 of the Income Tax Law establishes that the ordinary fiscal period for determining and filing CIT runs from January 1 to December 31 of each year. This uniform framework allows all taxpayers to settle their profits within the same fiscal cycle, facilitating tax administration and audit processes by the authorities. In addition, other provisions of the Income Tax Law and its Regulations provide criteria for determining taxable income, including the proper integration of income derived from economic activities, thereby ensuring the principles of universality and neutrality in profit taxation. Regulation of the Income Tax Law Executive Decree number 43198-H, known as the Regulations to the Income Tax Law ("ITLR”), develops the operational provisions of the Income Tax Law and establishes, in Article 12, the authority of the Tax Administration to authorize special fiscal periods with start and end dates different from the ordinary fiscal period. Such authorization is subject to: Justification of the taxpayer’s economic or financial need. Safeguarding the State’s fiscal interests, ensuring that the measure does not result in a loss of tax revenue or an alteration of the taxable base. The purpose of this authority is to allow taxpayers whose activity or accounting cycle does not align with the calendar year to adapt their fiscal period so as to more accurately reflect their economic reality, without modifying the applicable tax burden. Resolution MH-DGT-RES-0015-2025 Resolution MH-DGT-RES-0015-2025, published in Supplement number 93 of the Official Gazette "La Gaceta” on July 24, 2025, expressly repeals Resolution DGT-R-016-2021 and constitutes the current regulatory instrument governing changes to the fiscal period in the CIT purposes. Among the most relevant aspects of this resolution are: Authorization of special periods: Allows for the establishment of start and end dates different from the ordinary period, provided that the conditions set forth in the resolution are met and in accordance with Articles 4 of the Income Tax Law and 12 of the ITLR. Determination dates: All special periods must begin on the first day of a month and end on the last day of a month, ensuring clarity and uniformity in fiscal accounting. Alignment with economic reality: Special fiscal periods seek to ensure that the determination of results reflects the taxpayer’s operational and financial cycle, without affecting tax revenue. Procedure and obligations: The resolution regulates the submission of the request, evaluation criteria, notification of results, and compliance obligations once the special fiscal period is authorized. Taken together, the Income Tax Law, the ITLR, and Resolution MH-DGT-RES-0015-2025 constitute a solid legal framework that allows taxpayers to manage the authorization of special fiscal periods in a transparent, justified manner, with clear fiscal safeguards. Rationale and Purpose of Special Fiscal Periods Special fiscal periods respond to the need to align tax determination with the economic reality of companies whose operational cycles do not coincide with the calendar year. In certain sectors, mismatches arise between income and expenses, for example, activities with marked seasonality or subsidiaries subject to international consolidation processes with different reporting dates, which may distort the determination of taxable income if the ordinary December year-end is maintained. From a tax perspective, this mechanism does not imply a reduction in tax collection, but rather a timing adjustment that allows the taxpayer’s economic results to be reflected more accurately. Transitioning to a special fiscal period requires appropriate accounting adjustments, including the proper reconciliation of income and expenses and the corresponding supporting documentation support, to avoid inconsistencies in potential audit processes. Eligible Taxpayers for Requesting a Special Fiscal Period National regulations establish clear criteria to determine which taxpayers may qualify for this authorization: Taxpayers legally required to submit audited financial statements to public autthorities , with a fiscal year end other than December. This applies to individuals or legal entities regulated by special laws that require external audits. Taxpayers expericencing mismatches between income and expenses, when the economic cycle generates income and profits in a period different from that of expenses and investments, affecting the accurate determination of taxable income. Subsidiaries of foreign parent companies, provided that the parent company is required in its country of origin to prepare consolidated financial statements for a period different from the ordinary fiscal year. Branches or agencies of foreign companies required to comply with consolidation or financial reporting obligations on dates different from the ordinary year-end. The common element is the taxpayer’s economic and accounting reality, which justifies the adoption of a special fiscal period. Application Procedure Requests to change the fiscal period must be submitted through the integrated TRIBU-CR system, by selecting the option: "Request to change the fiscal period for other economic activities.” To support the request and justify the need for a special fiscal period, the taxpayer must provide applicable documentation according to their situation, which may include: Audited or certified financial statements, as applicable. Evidence of the economic cycle demonstrating the mismatch between income and expenses. Documentation supporting consolidation obligations with parent companies or foreign entities. It should by noted that the platform also includes a separate procedure entitled "Change of Fiscal Year for Coffee or Sugarcane Cultivation” which must be submitted exclusively by taxpayers engaged in those specific economic activities. The Tax Administration has a two-month period to approve or deny the request. However, due to process modernization and the volume of pending applications, this period may be extended. Accordingly, it is advisable to submit the request well in advance and accompanied by all supporting documentation. Practical Considerations and Recommendations To increase the likelihood of approval and ensure an orderly transition, tax payers should consider the following: Clear technical justification: The application should clearly explain how the taxpayer’s economic cycle generates a significant mismatch between income and expenses, and why the ordinary fiscal period does not adequately reflect taxable income. Sufficient supporting documentation: financial statements, evidence of seasonality, international consolidation obligations, or other relevant documentation should be submited. Strong documentary support is a key factor in administrative evaluation. Prior accounting planning: Before submitting the request, it is advisable to assess the effects on accounting closings, partial tax payments, and transition periods, ensuring that internal systems allow proper implementation. Timely submission: Given that the Tax Administration may take up to two months, or longer in practice, to resolve the requestearly submission is recommended. While special fiscal periods can improve alignment between accounting and taxation, their adoption requires prior strategic analysis and technically sound execution. Conclusions The authorization of a special fiscal period for Corporate Income Tax purposes constitutes an exceptional mechanism that allows the alignment of tax determination with the taxpayer’s economic reality, without affecting tax collection or the interests of the State. Its application is limited to specific, duly justified circumstances, such as a substantial mismatches between income and expenses, international financial consolidation obligations, or particular regulatory requirements. In all cases, administrative approval must clearly define the start and end dates of the special fiscal period, as well as the rules applicable to the transition period. Ultimately, a change in the fiscal period does not constitute a tax benefit per se, but rather a technical and accounting tool that enables a more accurate determination of taxable income. Its proper implementation requires regulatory analysis, financial planning, and specialized guidance to ensure legal certainty and efficient compliance. Having specialized advice ensures that the procedure is managed efficiently, with solid economic justification, complete documentation, and adequate accounting transition strategies. At ARIAS, our Tax Law Team has the necessary experience to advise you on the evaluation, application, and implementation of a special fiscal period, ensuring an efficient process, properly substantiated and fully supported by the applicable legal framework. The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.