The list
| What | Detail |
|---|---|
| Permanent improvements and investments | What is capitalisable goes to assets and depreciates; it is not an expense of the period |
| Expenses unrelated to the business | Those not arising from the taxable activity, unsupported ones, and those of another period |
| Income tax, VAT and excise tax themselves | When you are a taxpayer for them |
| Fines, surcharges and tax interest | On any tax, including payment arrangements |
| Dividends and profit shares | What is paid to members, shareholders or owners |
| Expenses abroad | Except those expressly authorised |
| Luxury and personal recreation | Investments of that nature |
| Purchased intangibles | Goodwill, trademarks, formulas, processes and similar |
| Withholdings and advance instalments of the tax itself | They are credit, not expense |
| Pay not subject to social security | What is paid to someone without registering them |
| Gifts to members or relatives | Presents, royalties and donations to them |
| Subsistence expenses | Those of the taxpayer and their family |
| Interest the owner pays themselves | Or to their spouse, children or relatives to the third degree |
| Capital losses | On transfers of movable or immovable property, with the exception the law provides |
| Expenses in non-cooperative jurisdictions | Unless you prove the transaction was real |
| Gifts and bribes | To public officials or in the private sector |
The three that appear in almost every set of books
-
Tax authority fines and interest
They are recorded as an expense, because they are one, and they do not deduct. One of the first adjustments in any reconciliation.
-
Income tax itself
The tax expense account that appears in your income statement is not deductible for calculating that same tax.
-
Wages not subject to social security
Paying someone “off the books” has labour consequences, and a tax one too: that expense does not exist.
What a “non-cooperative jurisdiction” is
The least-known definition on the list, and the one that surprises people most. A country is considered non-cooperative if it meets either of two conditions:
- Its profits tax rate is below 18 % — more than 40 % below Costa Rica's 30 %.
- Or it has no information exchange agreement with Costa Rica.
The tax authority publishes the list at least once a year. Check it before contracting a service abroad if the expense is going to be significant.
Why this is called a reconciliation
Your income statement measures the result under accounting rules. The return measures it under tax rules. They are not the same thing, and neither is wrong: the reconciliation is the bridge between them, and this list is most of that bridge.
The reconciliation, from the entries
The income statement comes out of the accounts, with comparatives and an Excel export: the starting point of the reconciliation, already balanced.
See how it worksAbout this article. The list is article 9 of the Income Tax Act, which is exhaustive and not illustrative; the definition of a non-cooperative jurisdiction comes from the same law, and the list of countries is published by the tax authority.
Verified as of 24 September 2026. Tax rules change. This is information, not tax advice.
Sources: Current legal texts (Sinalevi) Ministry of Finance