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Finance Ministry updates income tax brackets, raises tax-exempt salary limit

Employees whose gross monthly income is less than ₡793,000 ($1,455) will be exempt from paying income tax, according to the latest update for the fiscal year 2015 approved by the Finance Ministry last week.

Finance Minister Helio Fallas on Friday signed a decree with the new income brackets, and President Luis Guillermo Solís is expected to sign it and send it for publication in the official newspaper La Gaceta this week.

The new tax provisions would cover income earned starting on Oct. 1. An income tax of 10 percent would be charged for salaries between ₡793,000 ($1,455) and ₡1,190,000 ($2,183).

Workers whose monthly salary is equal to or exceeds ₡1,190,000 would pay 15 percent on the amount over that figure.

Employers are responsible for collecting the tax and paying the Finance Ministry no later than the 15th of each month.

The income tax brackets are calculated using a formula that takes into account the consumer price index (IPC) as reported by the National Statistics and Census Institute, which recorded an annual increase of 5.46 percent when comparing 2013’s IPC with 2014.

Once published, employers must use the provisions of the new brackets for the next payment scheduled on Nov. 15.

Last year’s calculations resulted in all salaries lower than ₡752,000 ($1,380) being tax-exempt.

L. Arias
L. Arias
Reporter | The Tico Times |

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