In case you missed it, on 26th November 2013 Costa Rican Finance Minister Edgar Ayales and U.S. Chargé d’Affairs Gonzalo Gallegos finalized the agreement that all Costa Rican financial institutions would report the holdings of U.S. citizens living in Costa Rica, or face a 30 percent retention tax on payments from the United States.

This sharing of YOUR previously private, financial information is to comply with the U.S. Foreign Account Tax Compliance Act (FATCA)

As usual the authorities will speak effusively about how wonderful this is to prevent tax evasion without mentioning the fact that U.S. citizens are the only, extremely unfortunate first world citizens who are taxed on their worldwide income.

The other country – and it’s most definitely a third world country – which taxes it’s citizens on their worldwide income is Eritrea located on the Horn of Africa.

Supposedly FATCA will “benefit both countries” and they’ll waffle on about how it will help money laundering without mentioning that way more money is laundered in the U.S. than any other country… As the world’s #1 illegal drug consuming nation, it has to be, right?

Ayales Edgar, Costa Rica’s Minister of Finance said: “The signing of this agreement represents a breakthrough in international taxation and a major commitment by the country in fiscal transparency and automatic exchange of information relevant to tax and financial purposes…”

See what I mean?

Blah! “Breakthrough!” Blah! “Commitment!” Blah! “Fiscal transparency!” Blah!

Why don’t they just speak the truth?

“Yep! The U.S. is totally bankrupt! Hardly any of our giant multinationals pay any taxes in the U.S. anymore so we have to go after the poor schmuck who thought he was going to retire happily in Costa Rica on his teacher’s pension and Social Security… And everyone else!”

I sincerely hope that all U.S. expats living in Costa Rica understand that they must report their holdings even if they don’t earn a penny/colon!

Mark Nestmann is an International Tax Consultant who has shared his expertise with us in nearly 40 articles on WeLoveCostaRica.com including a few about FATCA. (You can see Mark Nestmann’s articles here.)

As soon as this agreement was signed I asked Mark what he thought and here’s what he said:

“This is a good thing for Costa Rica, because it means the banks won’t be put out of business by the 30% FATCA withholding. It’s not so good for tax evaders living in Costa Rica of course. In addition, Costa Rican banks will once again be able deal with US clients without worrying about tax compliance–the Finance Ministry will take care of that.”

So what do you do if you are a U.S. citizen who has bank accounts in Costa Rica and who has never reported?

Get professional tax help now please!

The U.S. Police State has not yet reached Costa Rica but, your previously private financial information will be shared with Big Brother soon so please make sure your financial affairs are in order.

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Please contact 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.”




Randall is also recommended Consultant by FogLamp.org and has been been involved in professional accounting, business management and tax advisory since 1995. Randall is fluent in English and is our Preferred Professional for Costa Rican tax matters.




Contact Costa Rica tax expert Randall Zamora for a free copy of his Costa Rica Top Ten Tax Tips, please contact him at:

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.