Information Snafu by The Tico Times

The article published on July 12th, 2022, in the digital newspaper “The Tico Times”, makes an executive summary of the Law and Regulations for Digital Nomads signed on July 4th, 2022 by the President of Costa Rica Rodrigo Chaves, however there are some inaccurate facts in there.

It is well-known, that the purpose of this Law is to promote the attraction of remote workers and service providers, in order to encourage long stay visits to Costa Rica and thereby increase the investment of resources and local consumption of foreign origin in the country.

For these purposes, the Law grants a series of tax benefits, among others, to those who meet the established requirements:

• Total exemption from the tax on profits known as income tax. In no case will the beneficiaries be considered as habitual residents of the country for tax purposes, nor will the income they receive from abroad, be considered as Costa Rican source.

Important: This benefit does not extend to other members of the beneficiary’s family group, who, if they wish to obtain these benefits, must apply and comply with the requirements legally established for direct beneficiaries.

• Opening bank accounts: Beneficiaries may open savings accounts in banks of the national banking system.
• Driving in Costa Rica using a foreign driver’s license: The Costa Rican goverment does not require foreign teleworkers to obtain a local driver’s license, they can legally drive with their country of origin one. The validity and expiration date of this license is not connected with their tourist’s status.
• Exemption from the payment of all taxes on the importation of basic personal equipment: This includes computer, photographic camera, telecommunications or similar equipment necessary to perform their work or services, provided that they comply with the proportionality criteria issued by the General Directorate of Customs.

According to the “The Tico Times” publication, it is implay that a person can bring up to two vehicles without paying import tax, which is not correct and misleads the interested parties. As seen in the highlighted part of the image:

In conformity with the applicable tax benefit on the importation of equipment, the worker or remote service provider can enter the country with the following equipment -as part of their luggage-, without prior procedure and payment of taxes, by stating that they are necessary for the performance of their work or provision of services:

• Personal computer
• Cell phone
• Electronic tablet
• Camera
• Audio recording and reproducing apparatus and its accessories

The exoneration benefits are immediately eliminated at the moment in which the Costa Rican Migration Department decrees the cancellation of the status, and in the case of equipment that is not part of the luggage, its exoneration must be processed through “Exonet”, in accordance with the procedures and formalities established in Executive Decree No. 31611-H.

It is important to clarify that if the beneficiary transfers these goods, even if the applicant has the subcategory of worker or remote service provider, they must pay the taxes from which they were exempted at the time. According to the above; once the migratory subcategory of worker or remote service provider is terminated or cancelled, they may dispose and transfer their equipment to third parties that do not enjoy tax benefits, prior liquidation of the applicable taxes; otherwise, if they keep their equipment, they will have to leave with them as part of their luggage.

ABOUT THE RESOLUTION PERIOD

The law and its regulations indicate that all “Digital nomads” applications will be resolved within fifteen calendar days, however, based on the experience and operational capacity of the Costa Rican Migration Department, these deadlines are quite optimistic and therefore, it is important that the applicant understands that these deadlines can be met or get extended a little, since the Public Administration of Costa Rica sometimes is not diligent enough or does not have the required operational capacity to meet deadlines.

For further details regarding the Digital Nomads Law and Regulation, please refer to the article on our website entitled “Digital Nomads, The New Regulation“.

FINAL COMMENTS

The article was removed from the TICO TIMES, and there was not an editorial correction or note made to that effect. In this date and age, becomes challenging to obtain the correct information. Please double check your sources for information.

If you have a question, please feel free to ask.