Costa Rica Taxes

Corporation Tax Costa Rica 2016 - wondering what will happen with it?

Corporation Tax Costa Rica 2016 - wondering what will happen with it?Is your property in Costa Rica owned in a corporation? You might have heard some stories about the Corporation Tax in Costa Rica but you don’t really know what is going on? Do you want to know what will happen to the corporation tax in Costa Rica for 2016?

Some owners of property in Costa Rica don’t even know that a corporation tax (impuesto sobre sociedades mercantiles) was created in December 2011 through tax law No 9024. I have written some articles about this tax earlier.

The existing corporation tax law No 9024 was declared unconstitutional in the Costa Rican Constitutional Court in 2015, annulling the collection of this tax for 2016.

The corporation tax funds usually go to the Public Security Ministry, the reason we already knew the government was not going to let it go so easily.

Costa Rica property tax

Costa Rica property tax

Costa Rica property tax or “impuesto sobre los Bienes Inmuebles” is calculated over the registered value of your property in the municipality where the property is located.

The percentage of the annual property tax is 0,25%, as regulated by Law 7509.

Costa Rica property tax runs from the 1st of January until the 31st of December of each year and is paid quarterly. In most municipalities you can request the annual amount in February and pay the whole year with a small discount, depending on the municipality where your property is located.

In Costa Rica you will not get a notice from the government that your property tax is due, like you do in many other countries. YOU have the obligation to know when to pay.

What if I don’t pay my Annual Costa Rica Corporation Tax?

What if I don’t pay my Annual Costa Rica Corporation Tax?

I get questions by email about the annual Costa Rica corporation tax that was approved in January 2012. In a past article I explained what this corporation tax is all about and why it was created. 

This is important information for most of my readers, since many of you own your Costa Rica real estate in a Costa Rican corporation or S.A. 

If you don’t want to run into trouble with your property own by a Costarican corporcation, I recommend you read the rest of this blog, as well as the 2016 update on the Costa Rican corporation tax.

This week, I received from one of my readers the following question:

I have noticed the following statement in your blog:

"The law allows for the corporations to dissolve automatically when the payment of the tax has three years in arrears. Could you please reconfirm this as someone told me the corporations will be struck off after TWO years (Not three years). Thank you for your time."

Change is in the wind for Costa Rica residency

by guest blogger Ticonuevo

Costa Rica visitor's visaAs of this writing, there have been several changes in Costa Rican policy and law that affect the financial wellbeing of long-term visitors, including those applying for one of the three immigrant resident categories.

The changes happened just before our arrival and we were not informed of them until the first full day we were in Costa Rica when we went visit our “domestic” lawyer (we also have an “immigration” lawyer).

So, we were not unexpectedly quite surprised.

Allow me to summarize the two changes that have the most impact:

US Tax Return Due Dates for Americans Living Abroad

US tax for Americans living abroad

Most U.S. citizens and green card holders rushed to file a US tax return by April 15. However, Americans living abroad on the regular due date of their tax return can take advantage of several extensions.

First and foremost, American expatriates get an automatic two-month extension until June 15 to file US expatriate tax returns.

The June 15 deadline is extended to June 17, 2013 because the extended due date falls on Saturday. American expats must remember that this is an extension to file but not to pay.

Any tax due must be paid in full by April 15 to avoid any interest. Penalties will start to accumulate after June 15. Taxpayers are required to attach a statement to their US tax returns with a summary of the overseas extension.

Will foreigners in Costa Rica hurt from capital controls bill?

by Ivo Henfling

Measure to slow capital inflow into Costa RicaPresident of Costa Rica, doña Laura Chinchilla, proposes a new bill to control capital that flows in and out of the country. The Colon is the most depreciating amongst 19 Latin American and Caribbean economies tracked by Bloomberg.

Doña Laura Chinchilla announced measures to slow capital inflows that she called “weapons of mass destruction” against the nation’s economy.

Is this bill an effort of keeping retirees and foreign investors out of Costa Rica? Will it hurt Costa Rica real estate owners? The Costarican government has created the Luxury Home tax as well as the Corporation Tax, both overrated in the press, but that is another story. Many of my readers have asked me for a comment on this proposed bill, so here we go.

Luxury Home Tax Costa Rica update

by Ivo Henfling

Luxury Home Tax Costa Rica 2013 updateThis week I have received an amazing amount of phone calls from home owners who did not know what to do about the Luxury Home tax Costa Rica and though I am not an expert on the Luxury home tax issue, I decided to update you all in a blog.

This tax, created by Ley Nº 8683, has to be paid before the 15th of January every year.

The Luxury home tax law or Impuesto Solidario, was invented and approved by the Laura Chinchilla government in October 2009 to eradicate the slums on Costa Rica and they decided the rich should pay for that. If you are reading this blog, you might be rich in the eyes of the Costarican tax department and you better keep reading.

Some of the people who call me to ask questions tell me things like "oh, my attorney told me my house does not qualify". Has your attorney been to your house? Does your attorney know anything about property values? Does he know about construction values? Probably not and that is the reason you should read on.

Real estate Escazu and zoning

by Ivo Henfling

Urban zoning in Escazu, Costa RicaI remember the times we had cows and horses in the streets of Escazu and you could build anything in real estate in Escazu you felt like and those are long gone now. There were no controls, building permits were not important and zoning did not exist. The 4 year Costa Rica real estate boom changed all that and suddenly we had quite a few 7 story condos. That was more or less the only thing the engineering department of the city of Escazu controlled, no more than 7 floors, due to the seismic code.

Not only traffic in Escazu has gotten worse, it is the same thing throughout the Central Valley and the entire world. When I grew up, we had only 1 car at home. My Escazu neighbor’s family has 6 cars now. The Municipality of Escazu has always been a little slow on things but in the last 2 years, things have accelerated.

How to pay the new Costa Rica corporation tax when out of the country

by Ivo Henfling

Do not lose any sleepless nights over the new Costa Rica corporation tax, GoDutch Realty has the solution for you.

Now, if you own a Costa Rica corporation or Sociedad Anonima or S.A. you are supposed to pay tax on this corporation. The new corporation tax in Costa Rica is something that many property owners do not know how to handle.

Especially those who not live in Costa Rica don’t know how to pay these taxes. GoDutch Realty is of course the first Costa Rica real estate company offering a solution to this. There has been talk about this corporate tax for a year and now it has happened. For the exact details on the what, the how and how much, you can read our last blog about it and for even more details go to our blog on the American European Real estate Group’s website.

The fact is that many people own a corporation in Costa Rica which in turn owns a property or several properties or a car. Others had their attorney constitute a new corporation to start a business in Costa Rica or planned to buy a Costa Rica property but never got to it for some reason and left the company without use. Now is the time to act.

Annual tax on Corporations in Costa Rica approved

Annual tax on Corporations in Costa Rica approved

The long discussed tax on corporations in Costa Rica was just approved. The first time I wrote a blog about the tax the Costa Rican government proposed on corporate tax was in December 2010, so the approval has taken quite a while.

That doesn’t mean, it’s 100% that this will all happen because the Costarican citizens have the option of what’s called Sala IV, a court where they can stop a train running at 100 miles an hour.

But for now, congress as well as Costarican government has approved the new tax, and it is coming into effect on April 1st, 2012.

Read the 2016 update on Tax on corporations in Costa Rica.