tax goes up, but traffic fines rise more
By the A.M. Costa Rica staff
The judicial salary on which many fines and taxes are based increased
just 4,000 colons for 2015.
The new rate is 403,400 colons, according to the Poder Judicial. That
means the tax on active corporations will be just 201,700. That's about
Inactive corporations will pay half that. The tax is due by the
end of January. The small increase will filter down to many other fines
and assessments because laws usually include this amount as a base. It
is the monthly salary of a designated judicial worker.
not include traffic fines. The Consejo de Seguridad Vial
said it would raise traffic fines some 4.59 percent. The traffic
specifies that the fine amounts are adjusted based on the rate of
inflation as reported by the Dirección General de
The lowest fine, such as the penalty for driving a vehicle on a
restricted plate downtown on the day it is prohibited, goes up 864
colons to 21,864 colons,
The major fines or infractions such as passing in a prohibited zone,
failing to have a license or speeding goes from 293,000 to 306,000
colons, some $579.50.
Senate staff recommends residency-based tax
By the A.M. Costa Rica staff
U.S. expats here who are victims of the many tax rules and regulations
issued by the Internal Revenue Service may get a break.
The Republican staff of the U.S. Senate Finance Committee has issued a
policy paper that proposes significant changes in the way overseas
citizens are taxed.
American Citizens Abroad, Inc., an expat advocacy organization, said
that the policy paper agrees with it that the country should adopt a
residency based taxation system. The expat organization had been
advocating this approach for years.
The United States is one of a very few countries that now taxes its
citizens on income earned anywhere. This has led to a series of complex
tax agreements between the United States and other countries in an
effort to avoid double taxation. But that effort is not always
In addition, U.S. citizens receive an annual tax deduction in earned
income of nearly $100,000. That may seem like a large amount, but
offshore construction laborers and other highly paid U.S. workers
easily exceed that limit.
The report is aptly called “The United States needs to rethink
its taxing rules for nonresident U.S. citizens.”
American Citizens Abroad, Inc. said a residence-based taxation system
is the same currently proposed for U.S. corporations.
“We think it makes sense to tax the individual, as a general rule, only
on income from U.S. sources.,” said the committee staff.
of course, will control both houses of the U.S. Congress in January,
but the issue seems to be non-partisan because many Democrats also say
the current system damages U.S. competitivity overseas.
This common sense approach is a marked shift from today’s uncompetitive
and discriminatory tax practices whereby American workers overseas are
sometimes taxed twice on the same
income in addition to facing onerous penalty fees for errors, omissions
and other discrepancies even if no taxes are owed, said American
The current laws have created requirements for American citizens to
file paperwork about their bank accounts as well as overseas earnings.
“We are thrilled to see members of the Senate Finance Committee joining
the growing chorus of supporters for residence based taxation,” said
American Citizens Abroad’s tax team director, Jackie Bugnion, in a
release. “As an organization ACA remains committed to working on a
bi-partisan basis with members of both parties to get these proposals
passed in 2015.”
The organization noted that its proposal entitled, “Residence Based
Taxation: A Necessary and Urgent Tax Reform” provides an in-depth
analysis of why the United States must change tax practices with
respect to overseas workers in order to remain competitive
internationally and avoid another economic downturn. The report is
Meanwhile at the international level, some 51 governments have
to implement automatic exchange of information beginning 2017. This is
the result of a meeting by the Global Forum on Transparency and
Exchange of Information for Tax Purposes in Berlin.
The Global Forum is the world’s largest network for international
cooperation in the field of taxation and financial information
exchange, gathering together 123 countries and jurisdictions on an
footing, the network said.
Costa Rica is a member, and Peru and
Croatia joined the Forum at the Berlin meeting.
More countries are expected to adopt the regulations soon.
The agreement is being called a major new step to boost international
cooperation against tax evasion.