orldwide income residents who live at least 183 days a year in Costa Rica will be charged
Global Income Tax (Rental Mundial) would apply to any person who spends at least 183 days a year in Costa Rica.

QCOSTARICA – Under pressure to raise revenue and reduce deficits, the Government of Costa Rica is preparing to collect income tax not only on earnings by persons or corporations within the country, but also on income generated abroad, a global income tax (renta mundial in Spanish).

Currently, in Costa Rica the taxation is based on the principle of territoriality, meaning that all personal income which has a foreign source is tax exempt.

If the proposal announced on Monday is adopted, the tax law would be amended to include A “tax resident” designation that would apply to any person who spends more than 183 days of a calendar year in Costa Rica.

The designation would equally apply to “perpetual tourists” (persons who live in Costa Rica and leave every 90 days to renew their tourist visa).

That is the word from Deputy Minister of Revenue at the Ministry of Finance, Fernando Rodriguez, speaking to legislators of the Commission of Inquiry on the Panama Papers, during the first hearing of the legislative forum.

To avoid double tax collection, Rodriguez explained of the possibility that a person does not have to pay the tax to the Costa Rican government if it has proof that they have paid income tax in the country where it was generated.

In addition, the Ministry of Finance is insisting on the need to create a database of shareholders and final beneficiaries of corporations, to improve its fight against tax fraud.

Earlier this year, a presidential decree, required the state bank, the Banco de Costa Rica (BCR) to open bank accounts to foreigners, allowing the government to identify and tax all foreigners living – legally or illegally in the country.

In an article by Daniel Woodall (www.usexpatcostarica.com) of June 7, 2016, he writes, “the proposed tax law would snare expats who work virtually from Costa Rica for U.S. companies and may claim the Foreign Earned Income Credit, applied on up to $100,800 annually for 2015. Since this income is exempt from federal income tax in the United States, it would be taxed fully in Costa Rica.”

The global income tax proposal is part of the Government’s tax reform package (Reforma Fiscal in Spanish)  it is trying to get through the legislative process.


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  • Jimmy Kirk

    Boy that is going to open a big can of worms for Costa Rica government. First there is the term used “tax resident” that will create or supersede the process of obtaining residency. Simply being in Costa Rica for 183 days will make the person a resident, hmmm, wonder how that is going to affect migracion here? There are many people that have invested heavily to become a resident and now they want to tax even more, guess what will happen to foreign investors? The negative list goes on. The true solution is to make cuts to operate within a budget, same as most people have to do.

  • costarick

    I give this proposed law little chance of passing, just like the proposed VAT of 15% has failed to pass, with the proposed law being over a year before the Legislature for debate. Not only would this global income
    taxation law kill the monetary benefits which come with attracting retirees, there are also too many
    influential Ticos, either Diputados, or otherwise, who would be negatively affected by such legislation if it passed.

  • costarick

    I give this proposed law little chance of passing, just like the proposed VAT of 15% has failed to pass, with the proposed law being over a year before the Legislature for debate. Not only would this global income
    taxation law kill the monetary benefits which come with attracting retirees, there are also too many
    influential Ticos, either Diputados, or otherwise, who would be negatively affected by such legislation if it passed.

  • NothingButNet

    Here’s a novel idea. How about enforcing the existing tax laws on Costa Ricans? I have seen Costa Rican landlords, contractors, business owners, and others openly discuss cash-only transactions for the purpose of hiding actual income from the government. It appears to be culturally acceptable here to avoid paying the government proper taxes owed. It is that same culture that drove Greece to financial ruin. Besides, there are not enough tax-paying foreigners in Costa Rica to make any meaningful difference in the Costa Rica budget, no matter how much additional tax the government imposes on them.