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(506) 223-1327        Published Monday, March 13, 2006, in Vol. 6, No. 51          E-mail us    
Jo Stuart
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Analysis of tax package (5)
Foreigners will have to list assets to avoid tax

By Garland M. Baker
Special to A.M. Costa Rica

Instructions on how to kill the goose that lays golden eggs. 

Step 1: Restrict the inflow of capital by taxing it 10 percent upon arrival in Costa Rica. 

Step 2: Make bringing money into Costa Rica as difficult as possible. 

Step 3: Tax the money heavily once it is here.

Article 7, Section 4 of the proposed fiscal plan assumes all passive income comes from capital of Costa Rican origin unless proven otherwise to the tax people. The burden of proof is on the taxpayer.

Passive income is income from activities in which the taxpayer does not materially participate, as in all rental activities, investment income like interest, dividends, and capital gains, and other forms of income like royalties and alimony, etc.

Under the new tax plan, all passive income will be taxed at a rate of 10 percent.

Foreigners moving to Costa Rica for the first time will have a grace period of one year to “patriate” or provide a detailed list of their assets outside of Costa Rica. 

In other words, if one moves to Costa Rica under the new fiscal plan, the country wants to add a person's worldwide assets to its tax base so it can tax the income derived from it every year if the money comes into Costa Rica.

Current residents, meaning anyone living in Costa Rica more than 183 days a year, will have six months after the passage of the fiscal plan to register their money outside of Costa Rica to avoid paying the 10 percent tax on funds brought into the country.   It is possible to register money not declared during this “grace period” later as long as no funds come into Costa Rica before registering them.

Furthermore, the same article states any money coming to Costa Rica is assumed to be taxable except for three exceptions:  The money has already been taxed under the law, the money is destined for investment in some money-making venture, or it was declared as described above as money to establish residency.

The tax department will reserve the right to evaluate, accept or reject, in whole or in part, the source and destination of the funds and have the final decision on any corresponding applicable taxes.

For those living on funds from countries considered “tax havens,” any money brought into Costa Rica will be taxed at 10 percent.  The Organization for Economic Cooperation and Development is assisting Costa Rica with lists of “tax haven” countries.  The list is lengthy and includes countries like Panamá and Belize.

This means any money determined taxable, money from “tax haven” countries and money not registered, will be taxed upon arrival in Costa Rica, implying upon deposit.  The bank receiving the money is responsible for withholding the 10 percent tax and sending it to the tax authority within 10 days.

The free movement of money into Costa Rica

A.M. Costa Rica graphic

by foreign investors is the reason the country has boomed over the past years causing tremendous growth and exponential increases in property values.

If the proposed new fiscal plan becomes law, and the forecast is that it will be soon, moving money in an out of the country probably will be so restrictive investor developers may look elsewhere.

Under the new fiscal plan, buyers who want to bring money into the country will have to declare the funds with the tax people. This means filling out forms and waiting for approval.  Once here, the money will be traced and tracked to control the taxable outcomes.

For those who want to retire here for a simpler life, they will have to fill out forms anytime they want to use money from their lifelong savings outside of the country.

It is unclear if a “cost-benefit” (in this case “tax-benefit”) analysis, has been run on this tax plan.

The proposed tax procedures have broad implications for the country's real estate market. For example, a buyer of real estate property can have the government grab 10 percent of the funds if the complex technicalities are not met or if tax officials disagree on the source of the funds.

In addition, a security issue emerges if wealthy foreigners must provide local tax officials with lists of their assets elsewhere.

Costa Rican officials are expected to trade detailed information with other countries, including the United States, to track down untaxed money.

The new fiscal plan passed its first round in the legislature.  It is currently under study by the Constitutional Court.

Garland M. Baker is a 35-year resident and naturalized citizen of Costa Rica who provides multidisciplinary professional services to the international community.  Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info.  Copyright 2004-2006, use without permission prohibited.

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Tico-style bullfighting
ends in death of man

By the A.M. Costa Rica staff

The odds caught up with an informal bullfighter Saturday when he died from injuries inflicted in the ring.

Dead is Diógenes Matarrita Araya of San Joaquín de Flores de Heredia. He died during one of those Costa Rica free-for-alls at a festival in San Josecito de la Montaña in Guanacaste.

A cameraman taped the confrontation between the bull and Mararrita. He was knocked to the ground once and got up and began to run, thanks to the help from an individual nearby with a cape who tried to distract the bull. But the bull was quicker and lofted Mararrita between the horns and threw him over the shoulder. The tape was played on Repretel Channel 6 Sunday.

The victim, 36, has two children. He is believed to have died from injuries to the head and neck rather than from being gored by a horn.

Contingents of improvised bull fighters make the rounds of the various fairs and fiestas where they crowd into the bull ring and count on the confusion of the bull and their fleet feet to keep them safe.

The biggest event is at the Zapote Christmas festival, and that is televised all over the hemisphere.

Big changes in works
for downtown buses

By José Pablo Ramírez Vindas
of the A.M. Costa Rica staff

There are big changes coming for the bus routes in downtown San José.

The plan, set out in detail Friday, directs many buses to Avenida 10 and Avenida 1 and keeps them off Paseo Colón.

Avenida 10 will have a reversible lane only for buses. The westbound buses will be directed to Calle 36, which will be reserved for buses, local traffic and emergency vehicles. From there, buses can go to the Autopista General Cañas.

The project will cost 263 million colons or about $522,000. Also involved are resurfacing projects, new bus stop shelters and traffic signals. This is the second stage of a project to save fuel downtown, officials said. The first stage was to keep 20 percent of the vehicles out of the downtown during rush hours each day.

Bus stops will be eliminated from the north side of Paseo Colón, and the bulk of the buses that now travel that street going west will be redirected to Avenida 1 and 3. Some stretches of road will have parking spots eliminated.

A stretch of Avenida 2 just west of the Hospital Nacional de Niños between calles 20 and 22 will be reserved just for buses and emergency vehicles.

Officials said they will begin the plan a week from today.  Changes in the location of bus stops will be posted in buses for each route.

Cuban ballplayer gets
his visa to U.S. at last

By the A.M. Costa Rica staff

Michael Abreu, the Cuban power hitter, was scheduled to show up at spring training for the New York Mets today.

After a long effort to obtain a visa from the United States, Abreu, who has refugee status here, finally got the document Friday afternoon. He planned to fly to Florida Saturday on American Airlines.

He is expected to spend several weeks in Florida training with The Met and then go for a few weeks to the Mexican league. He has been out of major league-level baseball for some time and needs a period of adjustment.

Abreu, well-known in Cuba as a baseball hitter and player, had been mired in red tape here, in part because he was unable to make individual contact with consular officials to determine what kind of visa he needed. He spent several weeks simply trying to get an appointment.

Tourist employees face
four masked robbers

By the A.M. Costa Rica staff

Robbers came in a bus pretending to be tourists Sunday at the Plaza Esmeralda in Pavas.

The four individuals in the microbus quickly put on masks and tied up a guard. A total of seven employees were on the premises. Some were beaten and later treated at a local hospital.

The robbers took only jewelry from the establishment, an employee said.

The plaza, in an out-of-the-way section of Pavas is a stop on many local tours.

Tot takes a long walk,
but the dogs find him

By the A.M. Costa Rica staff

This story has it all: a boy, dogs and a happy ending.

A 2-year-old boy walked away from his grandfather near Río Negro in Palmichal de Acosta Thursday afternoon while the man was gathering firewood in a coffee plantation.

The frantic grandfather sought local help and then the Fuerza Pública, which called in the Unidad Canina. Two dogs, Dana and King, took to the fields. Both animals searched the fields, and King turned up a stuffed animal that was said to be a favorite of the missing child.

Both animals followed the scent of the child more than a kilometer where they found him fightened but unharmed.

Store owner kills robber

By the A.M. Costa Rica staff

Two persons, including a 17-year-old, tried to stick up the JM jewelry store Friday in Alajuela shortly before 2 p.m.  The store owner was quicker on the trigger and killed the minor and sent his 20-year-old companion to the hospital in serious condition, according to the Judicial Investigating Organization.
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San José, Costa Rica, Monday, March 13, 2006, Vol. 6, No. 51


This handy phrase delivers just the right touch
Un Toquecito

“Just a little touch.” This is not really a dicho, but rather it is a sort of figure of speech that has made its way into the everyday conversation of many Ticos.

My personal theory is that un toquecito originated from the first and second person present subjunctive of the verb tocar, to touch, as used, for example, in the phrase toque la puerte, “knock on the door.”  The use of the subjunctive in this case indicates extreme  politeness, almost delicacy. One does not pound on the door, one  lightly and gently “touches” it so as not to frighten or inordinately disturb the people inside. Such phrases clearly originated in an era of greater courtesy and graciousness than the present.

But, be that as it may. The addition of the diminutive cito to toque  adds a degree of reticence to the subjunctive mood. For example when answering the question: Would you like a piece of cake? ¿Quiere un  pedazo de pastel (queque in Costa Rica)? The response un toquecito  has far more to do with good manners than the quantity of pastry desired.

Another example of the use of un toquecito would be in response to  ¿Como esta?  You might say: Tengo un toquecito de gripe, meaning “I’ve a touch of the flu.” Here toquecito indicates that your malady is  nothing serious enough to be of concern to your interlocutor.

Other examples are: ¿Habla español? Si, un toquecito. And also:  ¿Quiere visitar los Estados Unidos?  Do you want to visit the USA?  Tengo un toquecito de ganas solamente. I only feel a little like it.  (This last response might be accompanied by a slight shrug of the  shoulders.)

When I was in school, my younger sister and I were in the same mathematics class. We had a schoolmate named Gerardina. She was very nice but every time 

way we say it

By Daniel Soto

she asked a question in class she would proceed it with the phrase un toquecito, meaning, in this case, “just a  moment.” So, of course, she acquired the nickname “Un Toquecito.

One day my sister was explaining to the class how she had solved a particular equation when suddenly Gerardina’s hand shot up. “Un  toquecito, un toquecito,” she eagerly cried.

My sister interrupted her explanation and dispatched Gerardina’s question in a very disdainful and superior manner.

The class continued and our teacher introduced a new way of solving quadratic equations even faster. We were all engrossed in his explanation of this procedure when my sister raised her hand to say that she didn’t understand how he had reached his conclusion so fast.  Whereupon our teacher assumed the same haughty manner that my sister had used in responding to Gerardina.

We all laughed, and from that day forward there were two students in our class with the nickname Un Toquecito instead of just one.

Raid on Bodog mansion gives poker TV show a boost
By the A.M. Costa Rica staff

Some in the gambling industry wonder if super promoter Calvin Ayre is really unhappy about the raid that took place at his Santa Ana home Friday.

Ayre is a well-known promoter through his Bodog.com organization, and some who have followed his gambits wonder if the raid by investigators is not exactly what his poker championship reality television show needed.

Ayre is the man who offered $50 million in January 2005 for a bowl game between the two top-finishing U.S. college football teams. His career has been marked by many other promotional stunts.

The raid took place at the upscale Valle del Sol subdivision where the so-called  Bodog Compound is located. The raid seems to have taken place after the sixth and final taping of the $500,000 reality poker championship.  The  "Calvin Ayre Wild Card Poker" is supposed to air six Saturdays in a row starting April 15 on Fox Sports. The participants in the poker event include celebrities and well-known poker players

The Judicial Investigating Organization, Ministerio Público employees and Fuerza Pública officers confiscated two computers in the raid. They also said they found four Canadians, presumed Ayre bodyguards, carrying handguns. Carrying a handgun without a license is a crime in Costa Rica, but no arrests were made. Officials said later that the four persons were invited to leave the country within 48 hours.

The raid appears to have been under the supervision of a local fiscal, and Ayre is supposed to appear this week to respond to official questions. The reports of the raid was distributed rapidly via gambling news channels on the Internet.

Bodog file photo

The raid was based on a section of Costa Rican law that forbids games of chance. The penalty is a fine. The March 6 press release about the poker tournament suggests that the participants would be playing for a $50,000 preliminary prize. But it does not say that they have to bring a stake to the table.

The raid comes only a few days after Ayre was named a billionaire by Forbes Magazine. Bodog processed $7 billion in wagers in 2005, according to its Web site. Ayre, 44, a Canadian, came to Costa Rica in the 1990s and began building his online gaming company.

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San José, Costa Rica, Monday, March 13, 2006, Vol. 6, No. 51

Readers respond to concerns about U.S. human rights
He supports views
in letter from reader

Dear A.M. Costa Rica:

The editors and staff of A.M. Costa Rica are to be congratulated on your publication on Page 3 of today’s edition of the critique of the human rights situation in the United States. One wonders how long you would have access to governmental newsmakers if you were traditional journalists in the U.S.

I am confident that you are under the careful surveillance of the U.S. government. Screw ‘em!

Keep up the good work.

David C. Murray
Grecia, Alajuela

Are we in far worse
trouble than we thought?

Dear A.M. Costa Rica:
Your current article detailing the long list of serious shortcomings including outright human rights abuses and election fraud by the current U.S. administration is so laughable since it was you who ceremoniously endorsed George Bush right prior to the election.
Now from your comments below on the article entitled “Human rights report on U.S. shows many deficiencies,”  it might suggest you are having some second thoughts about your previous level of support.  It makes me and many others wonder where were your heads at?
It’s like there this guy down here in Puerto Viejo all in support of the Iraq war now decides “it was a mistake and that they should pull out.” Great!  Just destroy a country, leaves it’s infrastructure in shambles and let it descend into civil war.  Don’t people understand the irreversible and long-lasting consequences of the people and their allies that they elect to office?  We can’t just blame it all on a “lapdog media”.
One last thing?  It amuses me that the author of the article chose to remain anonymous.  If we are to afraid put our name to an detailed article criticizing a government in a supposed democratic country, then Americans (and maybe us foreigners too given the way the U.S. likes to extend it’s reach) are in far worse trouble than I thought.
Colin Brownlee
Puerto Viejo, Costa Rica

We are a Socialist lapdog

Dear A.M. Costa Rica:
You must feel proud as an editor having endorsed an anonymous lettter.  If you feel that strongly about what he says, why didn’t you write an editorial (and sign it of course).  If the area Socialists need a lapdog media, they certainly have one there in Costa Rica.
Maynard Jolley
New Jersey

Discussion is current
even in fearful U.S.

Dear A.M. Costa Rica:

I have just finished reading the anonymous reader’s story about  U.S. human rights in todays edition.  I can say I’ve had this same discussion with no less than three people in the past two days.  This is seeming to become a major concern up here and no one is reporting it.  I’m  glad you had the courage to print it.

A lot of people don’t want to talk about it because of fear of reprisal. This was not the way it used to be in the U.S.  Things are changing here, and it is happening at an ever-increasing pace.

Many of us supported Bush, as your newspaper did, and we are at a loss for the reasons behind many of the actions of his administration.  It is causing a bit of nervousness that our country in 10 or 20 years will not resemble what it was a generation ago.

I’m sure in the coming months the “buzz” about this will continue to increase, and maybe other news outlets will feel the pressure to at least start reporting on the issue.
Al Loria
New York
Ultra-left foments fear
because it can't win

Dear A.M. Costa Rica:

The guest editorial you recently published regarding the issues of civil liberties and human rights in the United States compels me to respond. This story is laughable if intended as satire, but absurd if intended as a factual and comprehensive summation on individual rights in America.

The ultra-liberal left in the U.S. has made an industry of fomenting fear, hoping to use that fear to fatten their take at the ballot box. There is a reason they don't win elections; their ideas are not supported by the majority of Americans. The left make every outlandish charge possible regarding their predictable election losses, from voter fraud to the intellectual inferiority of "red-state" voters. Two things they never do is realize it's themselves that are wrong, and attempt to change they're perception of reality.

As an investor, I admire the body of work produced from the staff of A.M. Costa Rica, and regularly refer to it for information. Rest assured, the United States has not turned into the Nazi-style gulag that leftists portray.

from Moline, Ill.

It's yellow journalism

Dear A.M. Costa Rica:

Yellow Journalism

"Yellow journalism is a type of journalism where sensationalism triumphs over factual reporting. This may take such forms as the use of colorful adjectives, exaggeration, a careless lack of fact-checking for the sake of a quick "breaking news" story, or even deliberate falsification of entire incidents"

The only thing I can add is this applies to papers publishing unsigned/un by-lined articles that routinely trash the U.S.  Was that news?

Felix in Jacó
Closing of U.S. society
seen as partisan issue

Dear A.M. Costa Rica:

RE:  News article, ‘-Human rights report on U.S. shows many deficiencies.’

The author attempted to bash the United States and yet, fails to include the fact that there are 11 million illegal aliens living in the United States today.  Fails to suggest why folks from around the world would abandon their nations to flee to the United States.
Fails to mention that there are hundreds of thousands of aliens attempting to become citizens of the United States, today.  Why do these folks flee their nations in order to enter the United States?  That’s easy to explain. Because in the United States, they have freedom; they can choose their destiny.
I wonder why the author of the article failed to take credit for the article?
Search and seizure:  The Bush Administration was tapping phone calls coming into the United States, (only) from rogue nations that have stated they will destroy the western culture.  Would it be responsible action not to intercept these phone calls and not act upon the information collected?
The bombing of the Brooklyn Bridge was thwarted as a result of a wiretap. Would the author of this article prefer that carnage be allowed to occur instead of listening to phone calls from terrorist elements who want to harm, to kill American citizens?!
Wire tapping was conducted by scanning incoming calls electronically to the United States and listening for key words, such as “bombing, suicide, destruction and death.”
Disregard of habeas corpus:  The detainees in Cuba did not represent a nation; did not wear a uniform of a country.  They represent (only) terrorism.  If released, they would once again inflict mayhem and  death on citizens from around the world, given a chance.
Torture:  Abu Ghraib:  No one would seriously believe that making men wear panties on their head, or being naked is torture.  Torture is bombing mosques, killing children gathered who want candy and slitting the throats of civilians if demands aren’t met.
Political repression:  No names or incidents were provided as to who was being intimidated by the FBI.  The author’s statement lack facts; are therefore not credible.
Election fraud:  If their was election fraud in the state of Ohio, the Democrat party would not have conceded the election to Bush.
Press freedom:  CNN, The New York Times, The L.A. Times, The Boston Herald Media attempt to humiliate Bush daily.  No power on earth prevents them from disseminating their spew.
The subscriptions of the media have plummeted because John Q. Public no longer believe that newspapers are presenting the truth. That the press is presenting a distortion; intimidating their  intelligence.
Corruption: The Democrat party is no stranger to corruption

Marion Barry (D) former mayor of Washington, DC, was sentenced this week to three years probation for failure to pay his tax obligations.  Barry had been incarcerated twice already, for dealing in cocaine; on one occasion, while in office.

During the Clinton Administration, a massacre of  innocent American citizens was authorized by a Clinton appointee, Attorney General Janet Reno.
A murderous (Democrat party) government, sanctioned the slaughter of people who had broken no law (it is legal to protect oneself against attack).
John Kennedy and Robert Kennedy illegally wire tapped the phone lines of Dr. Martin Luther King in order to verify that he was an adulterer and use this information against him in the press.
Coincidentally, John and Robert Kennedy were  adulterers, as is Ted Kennedy, Bill Clinton and Jessie Jackson.
New Jersey Governor Jim McGreevey (D) announced that he was gay; that he had a consensual homosexual adulterous affair, and was resigning effective Nov. 15, 2004.

Sandy Burger, aide to Bill Clinton, was convicted for stealing documents from the National Archives.
Tom Torrecli (D) N.J., lost his post in New Jersey for accepting campaign bribes.

Jim Traficant (D-Ohio) was imprisoned, guilty of  bribery and racketeering.

Gary Condit (D-Calif.), career was ruined when it was  revealed that he had a personal relationship with murdered intern Chandra Levy.

Dan Rostendowski, (D-Ill.) pleaded guilty to mail fraud in 1996 and was fined and sentenced to 17 months in jail.
Governor of Alabama, George Wallace, (D), a  segregationist.  Would not allow black students to attend schools with white students.
Robert Byrd (D), a U.S. senator from West Virginia.  Former member of the Klu Klux Klan.

Ted Kennedy (D-MA) lost control of his car as it  traveled across a bridge in Chappaquidick, Mass., that cost the live of Mary Jo Kopechne.  Ted tried to convince a relative to take responsibility for his  crime.
Transparency and accountability:  What was the relationship between Vince Foster and Hillary Clinton?  When Senator Clinton was asked to provide documentation for Water Water, she had stated that  she had no idea where the files where.  Files on Water Water were found by a cleaning person on a cadenza in her office a few years later.

Disregard of Human rights:  Detainee’s are  combatants.  When a segment of Islam vows to destroy western society, when the president of Iran vows to sweep Israel off the planet, be advised, we are at war.  We need not provide detainee’s due process.
If only this person had provide facts, instead of school yard innuendo, his article might be considered, credible.
Bill McWade
Ocala, Fla.

Jo Stuart
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