Costa Rica’s Ministry of Finance has modified the income tax brackets for the taxable year 2014-2015 (from October 1, 2014 to September 30, 2015), as well as the tax credits that may be claimed by individual taxpayers.
Costa Rica’s Ministry of Finance has modified the income tax brackets for the taxable year 2014-2015 (i.e., taxable year from 1 October 2014 to 30 September 2015), as well as the tax credits which may be claimed by individual taxpayers.1 While tax rates remain the same for individuals, the income tax brackets are adjusted upwards. The adjustments are done in accordance with changes in the Consumer Price Index as determined by the National Statistical and Census Institute.
The published tables reflect the new income tax brackets and the rates applicable to individuals (as well as corporations).
International assignment cost projections and budgeting for assignments to Costa Rica and for assignees outside Costa Rica still subject to Costa Rican taxation should reflect these changes. Where appropriate, adjustments by payroll administrators to withholdings should also be made. The adjustments to the brackets and higher credit amounts should help to keep international assignment costs contained for those employees subject to taxation in Costa Rica.
There are changes to the tax credit amounts. Taxpayers can now claim an annual credit amount of CRC 17,880 per child annually or CRC 1,490 monthly (or for dependents who are disabled or undertaking “advanced studies” when under the age of 25) and CRC 26,760 annually for the spouse (if both spouses are taxpayers, the credit may only be claimed by one of them) or CRC 2,230 monthly.
1 See: Executive Decree N°38692-H published in La Gaceta (the official journal) N°223, November 19, 2014.
The KPMG International member firm in Costa Rica has provided updated tables (in English and Spanish) in the recently published “Update of Income Tax Brackets for the 2015” in its publication Tax & Legal News Flash (No. 2014- (October 28, 2014)).
For coverage of last year’s tax rates/brackets and credits, see Flash International Executive Alert 2013-154, 22 November 2013.
The information contained in this newsletter was submitted by the KPMG International member firm in Costa Rica.
© 2019 KPMG S.A., sociedades anónima costarricense y firma miembro de la red de firmas miembros independientes de KPMG afiliadas a KPMG International Cooperative(“KPMG International”) una entidad suiza. Todos los derechos reservados.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.