May 21, 2026
By: Gabriela Páez
Tax Manager - EAS LATAM
The case relates to an income tax assessment for fiscal year 2014, in which the Puntarenas Tax Administration made adjustments for an unjustified increase in net worth and for disallowed salary expenses. The discussion did not revolve around reclassifying loans as dividends, but around whether the company was able to adequately demonstrate the origin of the funds used to record accounts receivable from related companies.
Case summary
The Administration reviewed accounts receivable from related companies for CRC 340,711,313. The company recorded loans or credits in its favor with related entities, and the Tax Administration requested evidence of the origin of the funds used to grant those loans.
A second adjustment related to salary expenses for CRC 70,937,142. The company deducted salaries for an amount higher than that reported to the CCSS, and the difference was rejected because, in the view of the Administration, it did not meet the deductibility requirements.
The total adjustments to the taxable base amounted to CRC 411,648,455, generating an increase in the tax liability of CRC 107,792,670.
1. Accounts receivable from related parties: the starting point
The central issue was that the taxpayer maintained accounts receivable with related companies, arising from loans or credits recorded in favor of the company. From an accounting perspective, this means the company had recorded a right to collect from related entities.
For tax purposes, however, the Tax Administration did not limit its review to the accounting existence of those accounts. It requested evidence of the origin of the funds that made it possible to grant those loans.
2. The cash flow statement helped, but it was not enough
The company argued that the origin of the resources could be explained through its statement of cash flows, audited financial statements and certain movements derived from operations and financing. However, the Administration considered that this general financial explanation was not sufficient without reliable documents allowing it to specifically verify the origin of the resources.
This point is critical. A statement of cash flows can show, in aggregate, how funds were generated and applied during a period. However, by itself it does not necessarily prove the specific origin of each transfer, loan, assignment or intragroup movement. In an audit, traceability must be followed from the accounting record to the source document.
3. What must be demonstrated
Financial statements, subsidiary ledgers and accounting reports are essential tools, but they must be supported by contracts, agreements, bank transfers, assignments of rights, minutes, detailed ledgers and other documents that make it possible to prove the economic and legal reality of the transaction.
It is also relevant to clarify that the Administration did not treat these accounts receivable as dividends. The adjustment was based on the concept of unjustified increase in net worth regulated in article 5 of the Income Tax Law. Under this concept, when an increase in net worth is identified and its origin is not sufficiently proven, the taxpayer must demonstrate where it came from, whether it was already taxed, whether it is exempt or whether it is not subject to tax.
4. A legal presumption that may be rebutted with evidence
The Administrative Tax Court recalled that an unjustified increase in net worth operates as a relative legal presumption. This means that the taxpayer may rebut it, but only through sufficient and compelling evidence.
A general explanation of fund flows is not enough if there is no supporting documentation that allows the questioned operations to be verified. The discussion is not only accounting-based; it is evidentiary.
5. Salary expenses and consistency with the CCSS
The second adjustment concerned the disallowance of salary expenses. The Administration compared the salary expense deducted by the company with the amount reported to the Costa Rican Social Security Fund and determined a difference of CRC 70,937,142. That difference was rejected as a deductible expense.
This reinforces another practical lesson: accounting records, payroll, tax returns and third-party reports must be reconciled and consistent with each other.
Minimum evidence checklist
Intragroup loans: contract, terms, internal approval, repayment schedule and ledgers to demonstrate the economic cause and right to collect.
Bank transfers: receipts, bank statements, reconciliations and origin-destination traceability to prove the real flow of funds.
Assignments or restructurings: assignment agreements, minutes, annexes and valuation of rights to explain the legal origin of the account receivable.
Salary expenses: payroll, CCSS reports, accounting entry and monthly reconciliation to avoid differences between deducted expenses and third-party reports.
Financial statements: cash flow statement, notes, subsidiary ledgers and working papers to connect aggregate figures with source documents.
TFA Resolution No. 014-P-2026 reminds companies that orderly accounting is necessary, but not sufficient. In a tax audit, accounting records must be connected with concrete, verifiable and coherent documentation based on the principle of economic reality.
The main lesson for companies is that related-party transactions should be documented from the moment they occur. An intragroup loan, an account receivable or an assignment of rights should not be explained only through the balance sheet or the cash flow statement. It must have sufficient legal, financial, banking and accounting support.
In practical terms, compliance is not built at the time of an audit. It is built beforehand through clear records, complete ledgers, periodic reconciliations and documentary files that allow the reality of each relevant transaction to be demonstrated.
References
Administrative Tax Court, First Chamber, Resolution TFA No. 014-P-2026, January 15, 2026.
Puntarenas Tax Administration, Resolution MH-DGT-ATP-SF-RES-0020-2024, December 16, 2024.
Puntarenas Tax Administration, Determinative Resolution DT-06-FISC-R-028-2020, November 6, 2020.
Income Tax Law, Law No. 7092, articles 5, 8 and 9.
Income Tax Regulations, article 8.
Tax Code, Law No. 4755, articles 103, 146, 147, 176, 187 and 188.
General Directorate of Taxation, Institutional Criterion DGT-CI-001-2012, January 6, 2012.