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Do Retired Persons Pay Taxes On Social Security Or Pension Income In Costa Rica? Telephone interview with Costa Rica Tax Expert Randall Zamora
We had a huge response to my request for questions about taxes in Costa Rica so you'll have to forgive us for not being able to get through the hundreds of questions that you sent me but we tried hard to cover as much as possible in this 40 minute telephone call ...
Randall Zamora is President and CEO of Costa Rica ABC. He is the former CFO of multinational companies like Health Care Merger Inc and Four Seasons Resort Costa Rica and member of the InterAmerican Accounting Association, with 15 years years of experience in accounting, management and tax advisory.
Randall is fluent in English and during this phone call, he was kind enough to answer the following questions:
- Which professionals do and do not have to pay sales taxes?
- What are the current sales taxes?
- What taxes are retired people from the US expected to pay when they are living as retired people in Costa Rica?
- Do retired people from the USA or Canada pay taxes on their pension income or Social Security income?
- Do retired people from the USA or Canada pay taxes on any investment income?
- Is there more than one income tax?
- Do retired people pay taxes on their savings accounts in a Costa Rican bank?
- Do Realtors have to pay sales tax on their commissions received?
- How closely do the Costa Rica tax authorities work with the IRS?
- If I own a rental property in Costa Rica, should I be paying income tax?
- When would a US retired person pay income taxes?
- Do I pay income taxes on the gross revenue or the net profit?
- If I own real estate in the name of a corporation, should I be paying taxes?
- What happens if I do not pay my income taxes?
- What happens if I do not pay my property taxes?
- How quickly can the Costa Rican government take possession of your property if you do not pay your taxes?
- As a US citizen, what happens if I do not report the fact that I own a corporation in Costa Rica?
- As a US citizen, what happens if I do not report the fact that I have a bank account in Costa Rica?
- How does the new luxury property tax work?
- Should I pay property tax if all I own is raw land?
Telephone Interview With Costa Rica Tax Expert Randall Zamora
To listen to this 40 minute interview with Randall Zamora please click on the little black triangle below and wait a few seconds for the interview to load up.
Deceptive Articles And Misleading Information
A very popular newsletter about international living with the subject headline "Most Tax Friendly" says that:
"Some countries tax foreign residents only on income earned locally. In this case, you could not only earn millions outside the country, you could even bring your millions into the country to spend as you like (theoretically speaking). If you didn't earn it locally, the local tax collector would have no claim. This is as good as it gets from a tax-planning point of view.
Four key jurisdictions where this is the case right now are Panama, Belize, Uruguay, and Malaysia. As a foreign resident in any of these jurisdictions, you won't pay taxes on your pension income (as I said, though, you can take this much for granted most everywhere in the world); however, in these four countries neither will you pay income tax on any income from outside the country, be it passive or earned."
Frankly, I think this is very deceptive and it insinuates that these are the only four countries where a foreign resident won't pay taxes on pension income so let us make this crystal clear:
As a foreign resident or retired person living in Costa Rica...You will NOT pay any income taxes on your pension incomeYou will NOT pay any income taxes on your Social Security and... You will NOT pay income taxes on any other investment income from outside of Costa Rica.
Written by Scott Oliver, author of 1: How To Buy Costa Rica Real Estate Without Losing Your Camisa, 2: Costa Rica's Guide To Making Money Offshore and 3. ¿Cómo Comprar Bienes Raíces en Costa Rica, Sin Perder Su Camisa?