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Sometime within the next 4 years, I expect to retire to Costa Rica permanently. I think I’ve figured out a way to keep the whole “proposed” tax changes from affecting my plans in the slightest.
I’m going to drop a chunk of money, $60,000 to be exact, in BCR. That’s my Rentista account. That’s what I’m going to live on. I seriously doubt that the CR government is going to take a tax bite out of that $60,000, off the top. 30% = $18,000. No way they would do that. Tax the income on a CD account, sure, but not the principal. I just can’t see that happening.
All of my other investments and bank accounts are in the U.S., and will stay there. Income on my investments, interest, dividends, etc., will be deposited in my U.S. bank, and won’t come anywhere near Costa Rica. I’ll pay U.S. income taxes on that income, sure. If I withdraw some of that money via an ATM in Costa Rica, I don’t think the (Costa Rica) tax man will care. I don’t think that’s going to be traced.
Question: If my $60,000 in BCR is in an interest-bearing account, and I pay CR tax on that interest income, will I also have to pay U.S. tax on the same interest income? Aren’t measures going to be in place to prevent double-taxing the same income?
There seem to be a lot of people who are really concerned about the new tax proposals (remember, they are still just proposals at this stage!), and for some it even sounds like a deal-breaker. That is really sad, if someone changes their plans to retire in Costa Rica just because of this, or even worse, to move away because of it.
Maybe this is just me in “retirement frame of mind” mode, but if you are worried about higher taxes, why not just make less money, and you’ll pay less taxes! To do that, all you have to do is work less! Relax more! Don’t work so hard! Spend less time making money and more time in your hammock!
Please do check with your CPA but as far I know there is no double taxation.
As of 4pm yesterday the whole process by which the new fiscal plan was reached was unanimously termed as “unconstitutional.” So after four years of talking about – a monumental amount of time and effort – the new fiscal plan has been shot down, for the time being anyway.
Our new President Oscar Arias was genuninely “surprised” at this development and no doubt will be wondering how he will do the things he wanted to do without the monies that he had hoped would come from the new fiscal plan…
Our recommended accountant Randall, will write more about this in Tuesday’s newsletter but in the meantime – nothing is changing, probably for a year or so.
Scott – Founder
WeLoveCostaRica.comMy wife and I are seriously considering retirment in CR within the next two-three years. The recent comments about the recent tax changes have generated some concerns. Has there been some in depth data previously posted that we can refer to.
JRG
Jasman,
I like the way you think!! My husband and I allready have done that here in the states. We are both in our early 50’s and he is on social security disabilty and I went to working part-time (24hrs a week) a few years ago. We get by just fine, and when tax time comes, we may as well both be retired since we pay nothing, other that capital gains on our rental properties when sold!!There’s no in-depth data yet and won’t be for quite some time, this was only shot down YESTERDAY.
Since the fiscal plan has been shot down – There are no tax changes!
Scott
Hi,
Any tranfer on money is subject to the tax but this area is somewaht vague for its intent. Would a transfer of funds to buy property also be subject to the tax?
Any money in the USA is taxed by the new law. Your CD in the USA is no exception. YOU OWE TAX TO CR FROM ALL USA INCOMES AND YOU MUST DECLARE ALL ASSESTS.
Hoping that an ATM transaction is not traced is folly. It is electronic and subject to the most and easiest scrutiny.
DOUBLE TAXATION IS A MINOR POINT AS IN TIME THE USA AND CR WILL CREATE A TREATY. BEFORE THE TREATY IS DONE, HOWEVER, YOU ARE POTENTIALLY SUBJECT TO DOUBLE TAXATION. AFTER THE TREATY, DOUBLE TAXATION IS SOMEWHAT AVOIDED BUT YOU STILL PAY THE HIGHER TAX OF EITHER COUNRTY . AS THE CURRENT LAW IS CONSTRUCTED, YOU WILL PAY ALOT MORE TAX.
AS FAR AS THE NEW OURT RULINGS GOES, THE COURT REJECTED THE LAW BECAUASE A 2/3 MAJORITY IS NEEDED , NOT THE 50% .
The President is now creating a new tax law.
I just joined this site so sorry for my ignorance but what is the nature of the tax change you are referring to? We too are looking for prop
erty in CR as we speak.Timetogo – You are making a lot of sensational claims in this posting with no data to back it up.
Have you read the fiscal plan?
The existing ‘new’ fiscal plan has been dismissed and although they will come back with some other version, I would suggest that it is pure folly to guess what will be included next time. And, it’s NOT just the President involved, he was surprised that this was shot down.
Your statements suggesting that “YOU WILL PAY ALOT MORE TAX” when NONE OF US have a clue about what will eventually become law is irresponsible.
Please show us EXACTLY where you found the facts to make these claims?
Scott – Founder
WeLoveCostaRica.comAs stated, the whole process by which the new fiscal plan was reached was unanimously termed as “unconstitutional.” So after four years of talking about – a monumental amount of time and effort – the new fiscal plan has been shot down, for the time being anyway.
There are no changes and it is really a total waste of time GUESSING what MIGHT be incluided in the next version of the tax plan… It’s simply a case of ‘wait and see’.
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