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Leeph84 wrote:

Hi,

I'll be moving to Costa Rica next year and plan to try to get a temporary residence with the rentista route, and working my way toward permanent residency after 3 years.

I'm a UK citizen but work remotely/online as a Software Developer as a self-employed sole trader. I'll be living in CR throughout the year and will become a tax resident there and no longer be a tax resident of the UK (I plan to spend <16 days per year in the UK, own no property there etc).

I understand CR has a territorial tax system, but I think if I'm doing the work actively on CR soil then it's likely to be subject to taxes even if my clients are foreign (US/UK businesses) and the work is online. Please correct me if I'm wrong, but it would seem too good to be true otherwise and my interpretation was that territorial tax meant not tax only on *passive* foreign income.

But how will this work in practice? am I even allowed to register for taxes in CR on a temporary visa? am I even allowed to register as self-employed? I lived in Spain for a while and remember an arduous process to register as an autonomo with the hacienda; will there be something like this?

I'm reluctant to simply fly under the radar and not pay taxes to CR or the UK after moving there incase it comes back to bite me in the future, even if the realistic chance of audit is low.

DISCLAIMER: I AM NOT AN ATTORNEY NOR TAX CONSULTANT NOR ACCOUNTANT AND DO NOT PLAY ONE ON TV NOR ON THE INTERNET! So take my words with a grain of salt!

I'm an American and America wants its taxes from ANY country where you make money!

However if you have an internet business,  not a physical store or management business here IN Costa Rica (ie your business is conducted purely by internet) it is my understanding (?!) that you do not need to report any of that to Costa Rica! (I DO Need to report it to the IRS and State of my residency in the USA.)

The only time you have to pay taxes in Costa Rica (again, according to what I've read and been told) is if you actually conduct business as in a store or rental or hotel or etc - a physical business OR SERVICE that is conducted HERE.
If you do decide to enter into such a business HERE know that corporations are becoming increasingly expensive both in terms of paperwork and fees to conduct such business here in Costa Rica.

If someone wishes to weigh in and tell me I'm wrong, and point me to the laws regarding this, great. But this is my understanding of it.

Hey!

Did you end up finding more about this topic? I'm asking myself the same questions.

Did you keep your business in the UK?

thanks!

I wouldn't volunteer any personal and work related info to the CR government fo tax purposes. Why would you?

davidraycr1234 wrote:

I wouldn't volunteer any personal and work related info to the CR government fo tax purposes. Why would you?

to pay less/no taxes.

If you live in CR full time, there are no state taxes unless you have taxable interests in your state

davidraycr1234 wrote:

If you live in CR full time, there are no state taxes unless you have taxable interests in your state

For me the question is rather, if I'm self-employed (working remotely) in CR and start billing customer in Europe or the US, is that taxable in CR as it's? Not clear to me if you can even be self-employed with a temporary visa?

If you are living in Costa Rica but not physically  working in Costa Rica, and not being paid from a CR bank account in Costa Rica, you are not required to pay taxes in Costa RICA.

kohlerias wrote:

If you are living in Costa Rica but not physically  working in Costa Rica, and not being paid from a CR bank account in Costa Rica, you are not required to pay taxes in Costa RICA.

thanks kohlerias! But can one of my clients from abroad (USA or Europe) send money to my CR bank account? Like I send my client an invoice with my CR bank account number? Thanks!

The article above may answer some of your concerns, however it is 'still in the works.' At the moment you would have to leave then reenter CR, within the 90 days, unless you applied for legal residency, such as the 'Digital Nomad' visa.

When my spouse was working in a similar way, funds were often sent to the CR account, and no taxes were paid.