Read this legal breakdown of Costa Rica’s Global Income Tax project
Among the law projects comprising Costa Rica’s agreement with the International Monetary Fund is the “Global Income Tax.”
The project, worked under file No. 22.383, aims to unify the tax obligations for Costa Rica tax residents. Depending on the amount, higher earners would be taxed between 10 and 27.5%.
More than 140 pages of confusing legalese, the project includes portions indicating that income earned abroad will be taxed if it’s brought into Costa Rica.
The folks at Outlier Legal have summarized the bill and its implications for immigrants to Costa Rica (so-called “expats”). It’s the best English-language summary we’ve seen, and we highly recommend that you click here to read it.
“For the most part, I think foreign nationals who reside in Costa Rica will not be affected by this law,” concludes attorney Rafael Valverde, explaining that most expats will be exempt by proving they “keep their fiscal residency abroad.”
Of course, as Valverde explains, the bill is subject to change, particularly as the “unclear and confusing regulations” are hashed out. Among the considerations: How do foreigners prove they’re not subject to the tax?
All of this must be answered as the project works its way through the Legislative Assembly and before it’s implemented and enforced.
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