Wednesday 22 September 2021

Costa Rica: Personal Taxation

Paying the bills

Latest

Carlos Alvarado denounces violations of the Daniel Ortega regime to the UN

QCOSTARICA - In New York, Costa Rica President Carlos...

High Number of European Tourists Traveling to Costa Rica in Spite of the Pandemic

QCOSTARICA - A total of 21,969 tourists from European...

Costa Rica second last in economic recovery in the region

QCOSTARICA - The Central American region experiences very different...

TOP-5 real estate communities for a family life

Despite the fact that COVID-19 is slowing down the...

Today’s Vehicle Restriction September 22: Plates ending in “5 & 6” CANNOT circulate

QCOSTARICA - For today, Wednesday, September 22, vehicles with...

Group charged migrants US$22K to get them to the United States.

QCOSTARICA - A Costa Rican-Panamanian criminal structure charged migrants...

Laura Chinchilla calls to avoid a dynastic dictatorship in Nicaragua

QCOSTARICA - Former President of Costa Rica, Laura Chinchilla,...
Paying the bills

Share

tax-578x298
QCOSTARICA often gets inquiries about taxes in Costa Rica. For that we turned to Tax-News.com, a great source of tax information on Costa Rica and around the world.

The following is their take on taxes of individuals in Costa Rica:

In Costa Rica the taxation of individuals is based on the principle of territoriality, meaning that all personal income which has a foreign source is tax exempt. Only that proportion of revenue earned by an individual within Costa Rica is subject to an assessment by the tax authorities. However, this may change if the Costa Rican legislature manages to pass the long awaited fiscal reform package.

- Advertisement -

The principle of territoriality is perhaps the most significant aspect of the country’s fiscal regime. Costa Rica does not discriminate between the taxes payable by residents and non residents. The main taxes affecting an individual are income tax, employee social insurance, withholding taxes, capital transfer tax and selective consumption tax. There are relatively minor municipal taxes, and there is a tax on vehicles.

Income tax is levied on both employment source income and non-employment source income. While residents and non-residents pay the same income tax on employment source income there is a slight distinction between how a resident and a non-resident are assessed on their non-employment source income but the distinction is driven by pragmatic considerations and is not discriminatory.

The selective consumption tax, equivalent to a VAT, and levied at 13% has a major impact on the standard of living.

One of the key components of the Fiscal Reform Bill would be a switch from the sales tax to a Value Added Tax system; taxes payable by Free Zone companies would also be increased over a period of time, and it’s possible that the territorial basis of personal taxation would be abandoned in favour of world-wide income taxation.

There is no capital gains tax in Costa Rica. Whilst gains made by businesses on the sale of capital assets may be subject to business income tax, capital gains made by a resident or non-resident individual on the sale of a capital asset are exempt from any form of income tax.

No credits are granted in Costa Rica for taxes paid in a foreign country.

- Advertisement -

Source: Tax-news.com

- Advertisement -
Paying the bills
Q24N
Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

Related Articles

If your monthly income exceeds ¢683 thousand, you would have to pay income tax

QCOSTARICA - The potential development of the global income tax may...

Distrust of sectors complicate signing an agreement with the IMF this year

QCOSTARICA - Reaching a structural adjustment agreement with the International Monetary...

Subscribe to our stories

To be updated with all the latest news, offers and special announcements.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.