Costa Rica: Changes in Income Tax

The reform under public consultation includes tax on remittances sent abroad, on the payment or crediting of interest, commissions and other financial expenses by natural or legal persons domiciled in Costa Rica.

Friday, March 6, 2015

From the order by the Ministry of Finance published in La Gaceta:

Amendments to the Regulations on the Law on Income Tax

1. Through Law No. 9274 of November 12, 2014, "Comprehensive Reform Act No.8634 to the Law on Development Banking System and other Reform laws", published in issue No. 72 of La Gaceta No. 229 of November 27, 2014, legal reforms affecting taxes are established whose management and control is exercised by the General Department Taxation.

This legal reform aims to promote the injection of foreign capital for the benefit of projects which are part of the Development Banking System in force in the country, which sets new cases of tax subject , imposing reduced tax rates and the tax exemptions on certain financial transactions.

2. Article 60 of Law No. 9274 amending Article 59 of the Law on Income Tax, establishes in its new subsection h) liability to tax for remittances sent abroad, on the payment or crediting of interest, commissions and other financial expenses by natural or legal persons domiciled in Costa Rica, as well as leases of capital goods, to any entity or natural person domiciled abroad.

More on this topic

Costa Rica: Banks Facing Tax Reform

April 2015

In its comments on the bill on income tax and sales reforms currently under public consultation, a request has been made that financial institutions be subject to a system of global and not published income.

From a statement issued by the Costa Rican Banking Association (ABC):

Costa Rica: Single Tax of 15% on Financial Income

March 2015

If the Treasury's proposal succeeds, interest on bank deposits would incur 8% to 15%, while for revenues generated by mutual funds, the tax would rise from 5% to 15%.

This unification is due to the fact that currently there are different taxes for similar types of income, therefore the tax is not neutral, according to the CEO of Taxation.

Taxes on Offshore Banking in Costa Rica

December 2013

Congress is analyzing a 15% tax on offshore banks and 5.5% for banks domiciled in the country with presence abroad.

The Costa Rican Congress is considering three options for taxing offshore banking in a bill to reform the development banking system. "One proposal is for a tax of 5.5%, another is to exempt from taxes these type of banks and a third is a gradual tax", reported

Tax Changes in Costa Rica

March 2012

Already approved in the first instance, the draft Law on the Solidarity Tax involves substantial changes which will in general raise taxes on productive and commercial activities.

An article in reviews the main consequences of the adoption of the fiscal plan.

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