Thursday, June 1, 2023

Government proposes global income tax that goes from 10% to 30%

The government proposes to tax annual income of up to ¢4.7 million individuals at a rate of 10%.

But this tax will be paid by individuals after a significant minimum established at ¢10,104,000 per year and which corresponds to the annual amount on which no tax is established. ie, it would be paid on a surplus of up to ¢4.7 million.

Thus is the proposed bill to create a global income tax, part of a set of initiatives “for fiscal prosperity,” delivered to the Legislative Assembly this afternoon.

According to the proposal, income above ¢4.7 million and up to ¢11.4 million per year would be taxed at 15% and income above ¢11.4 million and up to ¢19.8 million would be taxed. 20%

The plan indicates that income between ¢19.8 million and ¢37.8 million would be subject to a 25% tax. Rents over ¢37 million will pay 30%. This final rate does not currently exist.

The determination of the general tax base shall correspond to the sum of full income, from which deductible costs and expenses established by law shall be reduced.

Net income will be integrated and offset to form the normal tax base, which will be adjusted by the significant minimum (¢10,104,000), which will correspond to the annual amount on which no tax should be established.

The tax seeks to tax Costa Rican source income dependent on individual work, pensions, the exercise of economic activities, as well as passive income generated in and outside the national territory. Taxpayers are natural persons resident in the country.

In case of income from legal persons, the Ministry of Finance proposes a single proportionate rate of 30%.

The tax rate on physical or legal income of non-residents will be 15% and the tax scheme on remittances abroad will be abandoned.

With the proposal, it is also intended that the European Union (EU) remove Costa Rica from its list of non-cooperative countries in tax matters.

Nation World News Desk
Nation World News Desk
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