Corp. Taxes Raise Approved.

[GEEGEE]

Scott,
What do you know about this increase in Corp Taxes of
$300.00 a year? Most Americans have a car in one Corp.
and a home in another.( Because they are targets for lawsuits) If you get into an accident with a Tico they will own you. Four of my american friends have experienced this.
That will be an added $600.00 a year for Taxes if you have 2 Corps and so on. Costa Rica is one of the most expensive South American Countries to move here and to live. They dont offer any incentives like the other S.A countries. WHY???
I also find it interesting that they are going to use
the funds for the ministry’s police school.Who and what are they? How about roads for the 100,000’s of cars that are added each year? In a few years this will be a disaster situation. Do they not see this?
I know this is a 3 dimmension comment with frustration.

gg

Article Below…

Lawmakers quietly approve new tax on corporations

By the A.M. Costa Rica staff

Before they broke for a Christmas vacation, legislators approved a new tax on corporations, President Laura Chinchilla plans a formal ceremony this morning to sign the measure. The event will be complete with the signing of the national anthem, flags and talks by top security minister officials.

The exact text of the measure was not available, but the law will be published in the La Gaceta official newspaper after Ms. Chinchilla signs it.

Although attributed to Ms. Chinchilla’s administration, the bill came to lawmakers in 2006 during the Óscar Arias administration.

The new tax covers all sorts of business entities, such as sociedades anónimas and sociedad de responsabilidad limitada. The $300 corporate tax is expected to raise about $30 million for the ministry’s police school. All money raised goes to the ministry.

There was discussion at the legislature, according to the minutes of the session. Some lawmakers objected to assessing the same tax on a corporation that holds no assets as the bill does on a giant company.

The proposed taxes do not identify or tax a show of specific wealth and does not depend on income
or earnings, noted an opponent, Carlos Góngora Fuentes of the Movimiento Libertario. That party later announced all of its lawmakers had voted against the bill. The final vote was 37 to 14.

Those in favor of the bill, mainly members of the Partido Liberación Nacional spoke at length and quoted from books by party founder José Figueres Ferrer, who favored taxing the wealth for the benefit of the poor.

The measure was No. 16.306, and it was approved on first reading in April.

The measure then went thorough Sala IV constitutional court review before the final vote.

Much of the session included discussion of taxes related more to the pending tax act that is being reviewed by magistrates.

Still unknown is when the tax must be paid. One version of the bill said it would go into effect 10 days after signing. Another version says three months. Owners of inactive corporations will pay just half of the tax.

Many expats hold their homes and vehicles in corporations. If the tax is not paid, the operators of the corporations will not be able to do official business, according to the bill.

[Andrew]

Thanks. We do not need to copy and paste entire articles from AMCR here.

We have a section entitled Costa Rica Lawyers, Laws & Taxes where Costa Rica tax expert Randall Zamora has written about this and other tax related topics.

His most recent article The Brand New Corporation’s Tax – Supreme Court says it’s OK can be read at: [ https://www.welovecostarica.com/members/3283.cfm ]

Having lived here for 12 years I don’t know anybody who is “owned” (whatever that means) by a Tico following a car accident so you certainly have some extremely unfortunate friends ….

We are in Central America and not Latin America and it’s interesting to note that Costa Rica offers more incentives – and way more affordable – for people to retire in Costa Rica than the U.S. does….

To get the EB-5 visa in the US requires a $500,000 investment… I wonder how many gringos retired in Costa Rica could afford that? I’m guessing about 2% of them …

I believe we expats thinks we are a lot more important than we actually are. I understand that many of us have purchased real estate but unless we are starting a business here and employing Costa Ricans, our overall contribution to the Costa Rican economy is fairly trivial.

Many retired people have more time on their hands than they did in the past and they begin to look around them at “how things work” and when that happens – in whatever country – they will dig up things they don’t like…

Happy New Year…

Scott

[Disabled Veteran]

If having read the article in amcostarica.com, is correct. The $300.00 is for active corps., inactive corps only pay half. In my humble opinion, these luxury property tax increases, and corp. tax increase; are a small price to pay, for enjoying all the positive aspects of Costa Rica. I pay several thousands of dollars, in U.S. property tax, in retaining my U.S. home. Often, we forget, we are guests of the Costa Rican people, for better or worse.

[waggoner41]

[quote=”Scott”] I believe we expats thinks we are a lot more important than we actually are. I understand that many of us have purchased real estate but unless we are starting a business here and employing Costa Ricans, our overall contribution to the Costa Rican economy is fairly trivial.

Many retired people have more time on their hands than they did in the past and they begin to look around them at “how things work” and when that happens – in whatever country – they will dig up things they don’t like…

Scott[/quote]

We expats are guests in Costa Rica unless and until we attain citizenship and as such we contribute very little to the tax base here. We are on about the same contribution level as the Tico attorneys, private doctors and politicians who live off the backs of the poor.

I hear arguments about how we contribute to the economy through land purchases and construction but they are one-time purchases and the resulting property taxes are quite low. Anything else we purchase is subject to a 13% sales tax. As far as hiring help, try offering $2.00 an hour to get any kind of help in the States.

Costa Rica would be well off with a progressive income tax system that includes taxation of any untaxed income that expats bring into Costa Rica including Social Security income.

Knowing that politicians in Costa Rica are no different than those in the States who are among the least intelligent of people and in their positions to see how much they can gain by greed, graft and bribery I have little hope of seeing intelligent change. 😆

[smekuly]

Disabled Veteren

its these complacent atitudes allows one to wake up in the future and say

holy smokes

how the heck did I get myslef into this :D:D:D

just as the law went into effect

there was a 14% increase in the tax since its linked to base salaries

so now its $350 or $174 for inactive

next year it goes up and every year it will go up.. so

if you have a property in a corp

you now pay your property taxes

then pay the corp taxes..

in a few years this will not look like such a deal anymore

[quote=”Disabled Veteran”]If having read the article in amcostarica.com, is correct. The $300.00 is for active corps., inactive corps only pay half. In my humble opinion, these luxury property tax increases, and corp. tax increase; are a small price to pay, for enjoying all the positive aspects of Costa Rica. I pay several thousands of dollars, in U.S. property tax, in retaining my U.S. home. Often, we forget, we are guests of the Costa Rican people, for better or worse.[/quote]

[Author]

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