On Thursday August 4th, The Costa Rican Congress approved the most recent change to the not so very welcome Luxury Property Tax which is now it’s second year.

The law, rates, brackets, deadlines and the overall law and rules of this tax remain exactly the same however, 38 of the law makers agreed on reducing the late filing fee.

Having said that, if the owner of a so called luxury house valued, according to the official value guide, in more than ¢100,000,000 (around $200,000) fails to file the tax return the late filing fee will be ¢146,700 (around $293.40) instead of ten times the unpaid tax as it used to be on the original law.

In addition, interest of 1% per month on the unpaid tax will have to be paid.

Many readers may think that by reducing the late filing fee there will be more chance for taxpayers to avoid paying this tax, but as it happens, the change to this law also includes severe penalties for the Tax Collector if they negligently fail to collect this tax.

To rent or buy this one hour video with Costa Rica Tax Expert Randall Zamora, please visit our Video On Demand page here.

If they negligently fail to collect this tax then the Tax Collector could face a fine equivalent of 20 to 30 monthly salary payments and, they could be fired so it’s safe for us to assume that these tax collectors will be diligent in their job!

It is worth mentioning that the Chairman of the Costa Rican Congress made an open and public commitment with President of Costa Rica Laura Chinchilla in order to “push” through the bill of the new flat tax on Costa Rican Corporations at a rate of $300 per year…

This doesn’t means that this bill will definitely become law, but at the very least it will be reviewed by the Congress. More to come on this issue.

Written by Randall Zamora who is the President and CEO of CostaRicaABC.com, former CFO and Head of Accounting Department of multinational companies like Four Seasons Resort Costa Rica, active member of the Interamerican Accounting Association, Pro Bono Local Partner of The World Bank and contributor to their yearly publication “Doing Business Report.”

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.