Costa Rica News – The Costa Rican government is trying t o make sure they get every penny out of those paying taxes on properties in Costa Rica. Obviously this is aimed at the foreign luxury property owner. However, again the government is not really thinking very well and this will generate less income for the government and cause more coruption. (You never would have guessed that right?)
This is established Tax Management Act, recently approved by the Legislative Assembly.
The owners are required to report to the city council the value of your property every five years.
This will cause property owners with expensive properties to get false appraisals for a lower value than what the property is worth. The other option is these values of properties are actually have gone down in many cases in this buyers market. Both are going to generate less cash for the Costa Rican government on this ridiculous unenforceable law
Article 10 of this law set a financial penalty for not doing the update.
“When the taxpayer has not filed the return, the tax authorities will impose a fine of an amount equal to the difference left to pay”, sets the rules.
So if a person paid ¢ 50,000 less for a year because you did not update the price of your home, the municipality may charge it.
Francisco Sánchez, Director of Revenue Management Services and the City of Heredia, announced that they have already applied that law.
That local government should updating property values.
However, this does not apply to all municipalities.
For example, Orlando Esquivel, head of collections of the City of San Jose, said there must first be an analysis of the Legal Department to define the way the law apply.
Some municipalities doubt whether the fine should be applied once or if possible give a grace period for taxpayers.
Randall Marin, legal adviser to the National Union of Local Authorities (UNGL), considers that the fine will cause more people to pay for the actual value. “The intent of the standard is to establish at least some penalty for this breach,” he said.
If you need help with filing your taxes personal or property in Costa Rica and need an English speaking CPA, We recommend the following CPA.
Robert L. Pioso, CPA, with 20 years of experience as a CPA, CFO and owner of a Costa Rican business can help you navigate through the complexities of US taxation for US expats and those who own investments and assets in Costa Rica. You can contact him for a free consultation – CR 6050-3831 or US 312-235-2301 or visit him at www.richcoastaccounting.com or email [email protected]. Rich Coast Accounting and Financial Services are focused at providing positive and tangible results that will bring real value to you or your business and offers a unique guaranty “You pay only for the value of the services received or the invoice, whichever is less.”