Warning: file_get_contents(http://rate-exchange.appspot.com/currency?from=USD&to=CRC) [function.file-get-contents]: failed to open stream: HTTP request failed! HTTP/1.0 503 Service Unavailable in /home/newsco/public_html/wp-content/themes/newszine/header.php on line 105
Exchange Rate: 1 USD = ¢
Banco BAC Banco BCR Banco Nacional Banco Popular Banco Scotiabank

New Income Tax Brackets for Fiscal Year 2014 in Costa Rica

Share

Costa Rica MoneyWage earners, self-employed professionals and businesspeople in Costa Rica who earn more than 752,000 colones (about $1,504) per month will be subject to withholding by the national revenue collection authority in 2014. Such is the Executive Decree issued by the Presidential Office in early October 2013. Workers who earn less than 752,000 colones per month in 2014 will be exempt from income tax obligations.

The minimum threshold for income taxation in fiscal year 2013 was 714,000 colones (about $1,428) per month. Individuals who earned from 714,000 colones to 1.07 million colones (about $2,034) per month were subject to 10 percent withholding on their income. The maximum withholding was 15 percent for those who earned more than $2,034 per month.

In 2014, those who earn $1,504 to $2,256 per month will be subject to 10 percent withholding. Those who earn more than $2,256 per month will be subject to 15 percent withholding. This applies to Costa Rican citizens, legal residents and foreign employees duly authorized to work by immigration authorities. Any income earned outside of Costa Rica is not subject to either withholding or taxation.

Not Much Withholding in Costa Rica

Based on the current minimum wages and salary ranges in Costa Rica, most workers will be exempt from withholding in 2014. A librarian, for example, earns between 98,651 and 147,241 colones per month (about $200 to $294). A bus driver on the upper range of the pay scale earns $600 per month, about the same as a bilingual tour guide. A chef can earn up to $900 per month. A coffee picker would have to deliver about 938 baskets of berries in a month before he or she is subject to income tax.

In other income taxation news, Costa Rica recently formalized the Foreign Account Tax Compliance Act (FATCA) with the United States Income Revenue Service (IRS). This topic has been widely reported on the pages of the Costa Rica Star, particularly as it relates to U.S. expats surrendering their citizenship in record numbers around the world. In some circumstances, a U.S. expat who earns a very high income in Costa Rica could end up being subject to withholding under both FATCA and the national revenue collection authority, but this would imply not taking advantage of any deductions or tax breaks.

Source: La Nacion

New Income Tax Brackets for Fiscal Year 2014 in Costa Rica
0 votes, 0.00 avg. rating (0% score)