Tax cops sweep Costa Rica's Central Pacific for tourism evaders

Tax cops sweep central Pacific for tourism evaders
SOURCE:  http://AMCostaRica.com/090412.htm#31

Tax and tourism inspectors have zeroed in on Manuel Antonio, Quepos and Jacó in an initial effort to find tax cheats. The agencies said that other tourism areas also will be inspected.

The sweeps target apartments, homes and condominiums that provide housing for tourists. Inspectors said they found 50 locations that appeared to be operating illegally. The operations appeared to be ignoring sales tax, income tax and, in some cases, municipal tax.

All property owners have to pay a municipal tax of .25 percent of the value of their property. Sales tax is 13 percent, and income tax is 30 percent of profit.

Property owners have to pay the municipal tax directly, and there is no notice. For sales tax and income tax, business operators have to register with the Dirección General de Tributación. Inspectors had lists of those operations that were registered.

Those tourism operations that were found to be operating illegally were given opportunities to straighten out the paperwork with the agencies. The inspectors were from the Instituto Costarricense de
Turismo and the Ministerio de Hacienda of which Tributación is a part.

Government officials and many tourism operators have long complained of persons who were housing tourists without paying the appropriate taxes. In many cases, the property owners are foreigners who do not live in the country but may rent out a condo or a house through an agency or by long-distance. Such activities bring the income under the domain of the tax authorities.

Although many rental owners do not collect sales tax, that levy is assessed on short-term rentals.

The tourism institute said that visits would be made to Guanacaste, Limón, San Carlos and Puntarenas where there is a large number of tourists.

The tourism institute noted that requiring all to pay taxes guarantees that tourism services will be competitive.

One reason the tourism institute backed a successful proposal for an arrival tax on tourists is because officials believed that many operations were failing to pay a special lodging tax. That tax has since been eliminated.