New Regulations Eliminate Income Tax for Those Who Earn Less Than 793,000 Monthly

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    The Costa Rica News (TCRN) – People who receive a gross salary (i.e. without deductions for taxes and social security contributions) less than 793,000 colones ($1,465) monthly will be exempt from income tax, according to new ranges defined today by the Ministry of Finance.

    However, those who make 793,000 to 1,190,000 ($2,198) colones must pay 10% and Costa Ricans who earn more than 1,190,000 colones monthly will be taxed at 15%.

    The decree was signed by Finance Minister Helio Fallas and will be sent to the Presidency of the Republic.

    Fallas signed the decree after taking into consideration data from the National Institute of Statistics and Census (INEC) and the Consumer Price Index, which experienced an annualized variation between August 2013 to the same period of 2014 of 5.49%, which is considered appropriate for indexing the amounts of installments and tax credits for the period 2015.

    Last year, the fixed amount (on October 2, 2013) for the person to keep the exemption was a gross salary of ¢752,000. Between that amount up to ¢1,128,000 they paid 10% and those exceeding ¢1,128,000 paid 15%.

    Floribeth Bonilla, tax manager at Deloitte, said that all companies must know how much money to retain from worker’s paychecks for the tax and submit a monthly statement to the Ministry of Finance.

    The rebate applies automatically each company and the employee should be aware that it is applied correctly. (Crhoy)

    The Costa Rica News (TCRN)

    San Jose, Costa Rica

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