Chance of Rain
Weather for San José:
High 31° / Low 18°
Chance of Rain
Click here for six-day forecast for 16 communities across Costa Rica!
CLICK HERE TO
SIGN UP FOR OUR FREE DAILY NEWSLETTER
BUY
541.00
SELL
553.00
BUY
584.60
SELL
614.60
BUY
406.18
SELL
430.18
Banco BAC
Banco BCR
Banco Nacional
Banco Popular
Banco Scotiabank

New Income Tax Brackets for Fiscal Year 2014 in Costa Rica

Share this article

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

Print Friendly

Related Articles

Costa Rica Economy Prompts Negative Outlook for ICE Bonds

Fitch Ratings has affirmed Instituto Costarricense de Electricidad y Subsidiarias’ (Grupo ICE) [...]

New Tech Services Center in Costa Rica Offers More than 100 Jobs

San Jose, July 21st 2016. Getinge Group announced the establishment of its new Shared Services Center [...]

Scotiabank Costa Rica Receives Major Unsecured Loan

Banco Latinoamericano de Comercio Exterior, S.A. (“Bladex” or “the Bank”; NYSE: [...]

Mystery of Costa Rica Rail Director’s Resignation Solved

A revolving door cabinet has been an unfortunate staple of the administration of President Luis Guillermo [...]

Concentrix Adds 700 More Positions in Costa Rica

By Wendy Anders Concentrix is a high value business services company operating in 25 different countries [...]

Tigo Business Brings Microsoft Cloud OS Network to Costa Rica

Stockholm – July 13th, 2016 – Millicom’s Tigo Business brand and Microsoft today announce a Microsoft [...]

New Money Transfer and Remittance Service in Costa Rica

Sharemoney, Omnex Group’s online money transfer service, is expanding services to include money [...]

Investors See Lower Expectations for Costa Rica Economy

The latest Central America Country Risk Report by Business Monitor International is now available, and it [...]