ABC of Income Taxes

Businesses that operate in Costa Rica as well as those who provide professional services have to pay an income tax, which varies whether it is a corporation or a physical person. They are commonly called “taxpayers”, and such tax is calculated over the income produced during the fiscal year, starting from October 1st to September 30th of the next year.

In the case of a physical person, the tax is applied over salaries, pensions, and other personal remunerations.

In the case of Corporations, the tax is applied over the profits gained in the accounting period. According to the Costa Rican Income Tax Law, the following should be registered as taxpayers:

* Legally registered and unregistered Costa Rican Corporations
* Branch offices, agencies and other permanent establishments of corporations without legal address in Costa Rica.
* Trusts created according to Costa Rican laws.
* Successions
* Corporations with legal address in Costa Rica, even if they were not created in the country.

In both cases, legal and physical person, the country of origin or jurisdiction is not relevant, as long as they are active in Costa Rica, and incomes are perceived in our territory.

In order to pay the corresponding amounts, both cases need to complete and present Form D-101 before the Tax Authorities, form also called “Affidavit for Income Tax”.

GLC provides legal services in Tax Law, contact us if you require assistance.

Applying for a K-1 Fiancé Visa

As a consequence of a globalized world, multicultural relationships have taken place in any country, creating the need in different legal systems to open possibilities for traveling, recognizing such bonds. One of our north neighbors, as well as a jurisdiction that has worked hand in hand with Costa Rica for a long time, the United States offer different options for those that seek to enter to the U.S. If the case is to immigrate to the U.S. with your partner, with the intention to get married in such country, your choice is to apply for a K-1 Fiancé Visa.

The K-1 Fiancé Visa is given for American citizens’ fiancé, in order to marry in the U.S. and to live there, becoming a Lawful Permanent Resident. If the fiancé has any children, an extensive visa called K-2 will be given to them, if her mother’s/ father’s visa is granted.

U.S. Institutions such as the USCIS (U.S. Citizen Services) and the NVC (National Visa Center) will be supervising all documentation needed, turning it into a six month procedure.

As part of the Immigration Services that GLC can offer you, we can provide guidance and advice if you are interested in this Visa to enter the U.S. Contact us for more information, and we will be glad to assist you when filing the required documents with this purpose.

Immigration Online system will become an Electronic Procedure Catalog

A few days ago, a Costa Rican website was enabled, considered at first for companies that need to complete the formalization procedures, and later to apply online for desired technicians and executives, basically for migratory aims.
So far, such mechanism has being useful only to download the necessary forms that need to be taken to the corresponding office, as well as to know the requirements when complaining before the Consumer Office and the Promotion of Competition Direction.
Members of the Ministry of Competitiveness assure that this possibility has saved the expenses and costs of obtaining the different documents required for several issues, avoiding a waste of time in lines, and presenting incomplete paperwork.

This mean is intended to become a “Costa Rican Catalog” that will include around 3.000 online procedures usually fulfilled in state institutions. The purpose is that each user will be able to complete every step involved: submission of forms, payment and inquiries.

It is binding for all state institution to place all the necessary information in the URL: www.competitividad.go.cr, site where the Catalog will be operating, in regard of the laws that protect citizens from excessive requirements and procedures. There was a $5.000 investment in order to make this project work, starting from next year.

Regulation for casinos and sports books currently in discussion

Last week, a bill was submitted to the Congress in order to regulate the activity of casinos and sports books in Costa Rica, consisting on a plan promoted by the Finance Ministry as a mechanism to defeat the fiscal deficit.

Some of the proposals included in the bill are:
* 2% tax applied to the monthly gross incomes of the operating centers. This sum will represent approximately one hundred million dollars for the State.
* 0,5% operating canon applied to gross incomes per year
* The creation of Gaming and Betting National Regulatory Commission, which will be in charge of gaming licenses, as well as the corresponding sanctions.
* Every Casino and Betting Center, whether physical or virtual, should keep accounting records, shown to the Financial Intelligence Unit of the Costa Rican Drug Institute, in order to control suspicious transactions and avoid drug trafficking and money laundering.

In the last two decades, at least six more bills of this kind were proposed, but none of them have been approved. Members of the Government consider the present bill will have success, since it seeks to attend taxation priorities.

However, representatives of the Casino Association consider the fact of imposing more taxes to the activity as excessive. They fear that applying two more taxes to gaming activities such as the aforementioned, Costa Rican casinos and sports books might not be able to bear such economic burden.

Mr. Augusto Arce, attorney at law and expert in Gaming Law believes regulating a complex field as the Costa Rica offshore gaming industry is a wiser decision rather than forbidding gaming activities, which bring economic opportunities to Costa Rica as well as a competitive position within other countries. It is important to visualize regulation as the opening for certain benefits, not as an obstacle.

New electronic Immigration Processing system available in Costa Rica

This past September 1st an innovative online registration system started operating mainly for transnational companies that require foreign executives or technicians here in Costa Rica.

This idea was promoted by the Ministry of Competitiveness and Immigration Authorities, and the first companies interested were Intel, Temenos Costa Rica, Ericsson and Surf Factory, however a long list of approximately fifty other companies are awaiting for this chance.

Basically, this mechanism intends to facilitate the procedure when applying for a work permit, this way companies have to be registered online (www.competitividad.go.cr/migracion/web/index.html). Later they file the information of each employee required in Costa Rica. Applications will be solved in ten days. If they are approved, the identity documents will be delivered through a mail system.

In the same web site other company formalization procedures can be done, they consist on basic previous paperwork such as:

• Operating Health Permit from the Health Ministry
• Work Risk Insurance
• Comercial License
• Registration as taxpayer
• Real Estate registry
• Construction procedures
• Environmental Impact Assessment
• Operation Veterinarian Certificates

GLC can assist you before, during and after the process, including all the requirements necessary for your company to be registered or recognized, as well as preparing the corresponding applications for the desired workers. We suggest you to contact our specialized Immigration Attorneys in order to obtain the proper guidance according to your specific case.

Recently approved plan to eliminate convenience marriages

Yesterday, a Bill to eliminate convenience marriages in Costa Rica was approved unanimously by the Congressmen on the first debate.Leaded by the representatives Evita Arguedas and Francisco Antonio Pacheco, this initiative is supported by Migration Authorities.

If the Bill is ratified on the second discussion in the Congress next week, witnesses, contracting parties and the public notaries involved shall be penalized from two to five years when it’s not for migratory effects. In the case of a migratory aim, convictions will range from three to six years. As well, notaries participating in such circumstances, next to the criminal sanction shall be unfitted to practice his/her profession from months to years.

This potential regulation is intended to control migratory processes, as well as the rights obtained when the union of a Costa Rican citizen and foreigner is declared. To avoid convenience couples from obtaining a migratory status, migration authorities should determine whether there’s a real relationship or not, allowing both Migratory Authorities and the Civil Registry to declare void marriages.

Members of the Congress consider necessary actions such as these have to be taken to control migratory status, since statistics show that in the past year approximately ten thousand unions of this kind were celebrated.

Moving to Costa Rica: The process…….

Step 1
Find a reliable international moving company, in order to help you plan every detail in advance regarding the relocation, since the moving and logistics requires special attention to detail.

Step 2
Decide on which belongings you will take with you the moment you will move to Costa Rica, in order to coordinate with the Costa Rican movers and to establish if these will be moved via air, sea or land freights, providing safe transportation. Costa Rican movers handles both household goods and office moving.

For more security, prepare an inventory to make sure all your belongings are specified, and to avoid things getting lost without your knowledge. This way, you can guarantee yourself an efficient service, and a successful moving process.

Step 3
Carefully, with the help of a moving company of your choice, pack and prepare the necessary goods you are moving to Costa Rica with you. Usually, Costa Rican movers will provide useful material for this purpose, such as custom-made packages and other protective stuff to wrap and pack every possession desired.

For an organized moving process, packed belongings must be labeled, to identify them when they arrive to the country of destination.

Step 4
Once the load has reached its destination, Costa Rican movers also offers unpacking and unwrapping services, as well as reassembling complex furniture that was moved to Costa Rica.

If there were any belongings that will not be transported immediately, Costa Rican movers facilitate warehouse conveniences, so that people planning to move to Costa Rica can count on these conveniences, until the supplies can be shipped.

If you are considering the possibility of moving to our country, GLC has an associated professional moving company that can coordinate and take care of the entire logistics of the process, regarding planning, implementing, and controlling the correct management and storage of goods, services, and related information from the start to the end of this process. Contact us for a free quote to info@glccr.com