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ARCHIVE Published Monday, November 5, 2018

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New headaches for vacation property owners


By A.M. Costa Rica staff


Nov. 1 was the deadline for everyone doing business in Costa Rica to give and accept electronic invoices. Much to the chagrin of Ticos and expats alike, this includes the renting of rooms, homes, villas, and any other type of temporary lodging for vacationers.

It does not matter if Airbnb, Vacation Rental by Owner, Booking.com, HomeAway or another firm provided the service to the customer. Costa Rica still wants the sale input into its system.

Electronic invoicing is all about better control over taking in sales taxes and improving income tax collection. Many people renting to tourists or those here in transit believe in tax avoidance and even outright evasion.

One person who rents to others said, “I use Airbnb, which is transparent to the tax people. I have no intention of using the new system.” This person does not know about the La Dirección de Inteligencia Tributaria. That is the intelligence division of the tax department.

Another expat who does not believe that the electronic invoicing requirement has a bite said: “I collect cash and only rent to tourists who find me online. Let the tax police catch me if they can.”

Here is a review of Costa Rica’s sales tax law. The rules are simple and governed by Ley 6826.  In effect, all products sold are taxable, and services are not, except for the exceptions.

Certain products are exempt from tax such as those deemed in the social interest like the canasta básica, the basic food basket.  If the law does not exclude a product or group, it is taxable.  Services, on the other hand, are not taxable, again except for the exceptions.

What some property owners and managers are willingly evading is a section of Article 1 of the law that assesses a tax on the value added in the sale of goods and the supply of the following: hotels, motels, boarding houses or temporary stays.

The section does not include rents and long-term leases mentioned in Article 4 of Ley 7527, the rental law: “This law applies to any contract, verbal or written lease of real property, wherever located and are intended for home or the exercise of a commercial, industrial, craft, professional, technical, health care, cultural, recreational activities or public services."

“Recreational activities” does not mean short-term rentals to tourists or motel rooms. Both are taxable, along with parking spaces and storage areas. Rental agreements in Costa Rica by default are for three years. So, it is pretty easy to figure out if a property is being rented using the rental law where there is a clear landlord-tenant relationship, and the transaction does not require sales tax.

La Dirección de Inteligencia Tributaria is the tax department’s C.I.A. Its job is to find tax cheats. The division increased its productivity over the past few years many-fold. A report that came out in May noted that in 2012 8,791 tax suspects were tagged. In 2016 there were 945,619, an increase of over 10,000 percent.

Anyone renting to others will recognize immediately what a pain this new requirement is going to be. Imagine getting a renter from Airbnb, collecting the money in a PayPal account in the United States and then have to navigate the local tax department’s electronic invoicing system to send the customer another invoice from Costa Rica.


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A.M. Costa Rica wire services photo


Rental customers are going to be confused too. They will get an invoice from Airbnb and an even a more cryptic one from Hacienda, Costa Rica’s tax department.

A local accountant tells a story about his mother-in-law who made bikinis as a home business and sold them online using Facebook and Instagram. One day she received a call from the tax department asking for her tax return. She played dumb and was amazed that the tax inspector had copies of every ad she had placed on social media.

In 2016 Airbnb approached Hacienda trying to make a deal to collect sales taxes to guarantee their collection. Kevin Chavarria, a C.P.A. and a very active accounting professional, said in an interview that “Hacienda was too hard-headed to negotiate, and there was no deal reached.”

Amazon collects sales taxes and sends the money to individual states making tax collection a breeze for Amazon products and services. Other online retailers do not, which creates a problem for tax collectors. Amazon found its policy a benefit for sales because customers feel better knowing the company is taking care of any tax liability.

Costa Rica’s new electronic invoicing system is not very friendly for those renting vacation properties. Most accountants agree it would better for the country to make deals with those firms providing the service internationally, like Airbnb.

To sum-up, income from anything rented in Costa Rica that is transitory or temporary generates a sales tax. Every transaction now requires an electronic invoice run through the tax department’s system. Those thinking about not abiding by the rules need to be aware Hacienda has an investigative department designed exclusively to find tax cheaters. The fines for not using the new system are outrageous and bank-breaking. Up to 43.1 million colons (over $70,000). Those numbers do not include additional penalties and jail time for tax evasion.

There is a new tax law on the horizon referred to as the ‘nuevo plan fiscal.’ It will not change the electronic invoicing requirement. It will change sales taxes to value-added taxes, and they will apply to many more products and include services.



Editor's note: Garland M. Baker is a 46-year resident and naturalized citizen of Costa Rica. His team solves problems for expats. Reach him at info@crexpertise.net. Baker has undertaken the research leading to his articles in conjunction with A.M. Costa Rica. Find the collection at http://crexpertise.info. A free reprint is available at the end of each piece. Copyright 2018, use without permission prohibited.


Kidnapping suspects sentenced says prosecutor


By A.M. Costa Rica staff

The Public Ministry ordered three months of preventive detention on Friday, for a Frenchman and a Nicaraguan woman who were arrested on suspicion of trying to kidnap a two-year-old child in Santa Ana, San José.

According to Walter Espinoza, General Director of the Judicial Investigation Organization, the French national was identified as Sacha Mirc. He has in Costa Rica since 2005 and was working as real estate broker.

The investigation found that Mirc publishes property sales on his Facebook page where he was recently promoting the sale of a house in Playa Brasilito.

Mirc lives with his girlfriend, a Nicaraguan woman with the surname Oporta said investigators. She is the second suspect and will also be in jail for the next three months.

Mirc and Oporta rented a house in La Uruca in San Jose, "a one-room house for which they paid $ 800 a month," said Espinoza.

Investigators report that Oporta has been registered to live in the country since 2008 and that she does not have children in Costa Rica.

According to the investigators, Mirc and Oporta tried to pretend to be police officers, then set up a check traffic point in the area of Pozos de Santana, managing to stop a vehicle in which a father and son were traveling. The victims’ names have not been published.

The investigation states that the suspects asked for the driver’s documents. When he opened the window to present them, a suspect tried to spray him in the face with pepper spray and Oporta took the child and put him into the escape vehicle.

Despite vision problems due to pepper spray, the boy’s father managed to chase the two suspects and ram the back of their vehicle causing it to crash into two other cars.

With the car halted, neighbors united to prevent the suspects from escaping. They managed to keep them inside their vehicle until the Santa Ana Municipal Police, the Red Cross, firemen and judicial officers arrived.


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A.M. Costa Rica wire services  photo

Mirck and Oporta will main in jail for the next
three months until a trial can be arranged.  


The suspects did not wear police uniforms or uniforms of judicial investigators, says the report. Instead, they wore black shirts with ‘police’ in white letters. The shirts were found inside the vehicle that the suspects were driving. Also in the car were food for children, two non-lethal weapons (that could easily be mistaken for real weapons), handcuffs, two cell phones and two different car license plates.

In the suspects’ home investigators found a car rental contract that corresponded to one of the two plates found inside the vehicle. The investigation is trying to determine the owner of the other license plate.

The director of the judicial organization called on people to remain calm saying, "there is no organized group to kidnap children.” Espinoza added that this situation was a plan devised by a single pair of suspects.

Espinoza added that for investigators everywhere, “any kidnapping cases is a priority, investigators focus on solving these crimes as quickly as possible, especially because we are not going to allow a kidnapping industry in Costa Rica as there is in other countries."

Meawhile the OIJ is completing investigation and will put together a case to present to the Prosecutor.  Mirck and Oporta will main in jail for the next three months until a trial can be arranged. 


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Second news page

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Japan donated equipment for forest protection

By A.M. Costa Rica staff

The National System of Conservation Areas has received a donation from Japan that includes seven boats, six cars, 11 drones and communications equipment. The donation will allow the system to protect and control the country's Protected Wildlife Areas more efficiently to the benefit of all the nation’s parks.

This donation was made by Japan through its Hatoyam project.

Four of these boats are fully equipped with high-power engines and state-of-the-art marine positioning systems, radar monitoring and echo sounders.

This equipment will be used for the control and surveillance of Corcovado National Parks, Santa Rosa National Park, the Del Caño Island, San Lucas Island and the Cabo Blanco Nature Reserve.

The three small boats are for the protection of wetlands in the Caribbean area of the country.

The six cars will be used for supervision actions by land within the National Parks.

The eleven high-tech digital drones are for the protection of remote areas where access is difficult and can be used in the investigation of protected forests.

The Japanese donation includes one high-tech digital radio communication system, which will improve communication in national protected areas.

According to Carlos Rodriguez Environment Minister, the donation was of utmost importance, since the protection of natural resources and security in the National Parks are a priority for the government. "It is extremely urgent and we are working hand in hand with the park rangers to strengthen the work of patrol and surveillance, as well as generate the necessary efforts so that those who fight for the protection of the environment have decent conditions and the necessary equipment to achieve it," said Rodriguez.


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National System of Conservation Areas courtesy photo
 
Donation from Japan that includes seven boats,
six cars, 11 drones and communications equipment
.

 

Grettel Vega, Director of the National Conservation Systems, stated that "the donated equipment is of great benefit for the programs of protection and control of our protected wild areas."

According to the government the equipment will be used to strengthen strategies for control, protection and conservation of biodiversity in the wild areas and give park rangers more resources in their pursuit of illegal hunters.

Japan and Costa Rica restored diplomatic relations in 1953. The area of Puntarenas and the city of Kesennuma, Japan, have been official sister cities since 1969. The relationship of both cities began through the exchange between the fishermen of both cities. The fishing vessels from Kesennuma visited Puntarenas for supply and when the Japanese had an accident, the fishermen of Costa Rica were able to rescue them.






















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Third news page


....


Juan Santamaria Airport remodeling, said government

By A.M. Costa  Rica staff

The Presidential House states that the first phase of the remodels at the Juan Santamaria International Airport will be completed in December at a cost of more than $96 million.

Expansion of the airport will increase the take-off of planes by one hour from 12 to 24.

The modernization is under the responsibility of the AERIS airport administration company, which started the project in June which states that the first stage will conclude in December and the second stage in March.

The project includes expansion of Block V, expansion of the terminal and a new lighting system. According to the AERIS report, the lighting system has not been overhauled for 40 years.

A remodeling in the southern sector includes five projects: a parallel taxiway south, relocation and extension of street known as La Candela, a security zone at the end of the track, an extension of the length of the track and a perimeter street east sector.

President Carlos Avarado, who visited the facilities to verify the progress of the remodeling, said that the remodeling will allow better airport security, expand flight capacity, attract more visitors and improve the nation’s export capacity.
Airport110518.jpg
Presidential House courtesy photo


Airport expansion plan will cost more than $96 million.


This remodeling is done to comply with the parameters of the International Civil Aviation Organization, a specialized agency of the United Nations.


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Fourth news page



Human Rights Commission congratulated
Costa Rica on handling of Nicaraguan migrants
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By A.M. Costa Rica staff

The Inter-American Commission on Human Rights (IACHR) published its preliminary observations on the work visit it made to Costa Rica last October in order to monitor the situation of Nicaraguan migrants in the country.

In its observations after its visit to Costa Rica, the IACHR highlighted the leadership and political will of the government in its effort to respect and guarantee the human rights of persons in need of international protection through important inter-institutional coordination and in cooperation with international organizations.

According to the Foreign Affairs Ministry, it has been, and is, of the utmost importance to ensure that the government treat this situation in an orderly, safe way and that the rights of the people are respected.

According to the Ministry, with limited availability of financial and human resources, Costa Rica has made enormous efforts to address the situation that has arisen with the high flow of migrants to the country.

However, international cooperation is imperative in order to continue the efforts made and strengthen the institutions that take charge of this issue.

The publication made recommendations to the government of Costa Rica which reflect the challenges that the country has in order to continue to provide attention to the massive migration that it receives for several reasons, among them, geographical proximity.


Nicaragua110518.jpg
A.M. Costa Rica wire services photo
Costa Rica respects and guarantee the human rights
of persons in need of international protection, said IACHR


The IACHR also made, "a call to the States of the region and the international community to implement a regional and international response based on shared responsibility and respect and guarantee of the human rights of these people, so that the Costa Rican State has the necessary resources to respond adequately and effectively to this emergency humanitarian situation. In this regard, the IACHR calls on the States of the region to strengthen humanitarian assistance to the people who are forced to leave Nicaragua, as well as the host communities in order to provide protection to the people who need it."

It is expected that the IACHR will issue a broader report of the visit in the coming weeks. Reader may reach the full statement here.

 





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Fifth news page

Speaking English means better jobs, said government

By A.M. Costa Rica staff

The Labor Ministry presented a study on "The benefits of bilingualism in Costa Rica," that was carried out by the Development Observatory of the Costa Rica University.

The study was carried out by researchers Alejandro Abarca and Suráyabi Ramírez. It is an analysis of the labor benefits of speaking English in Costa Rica and was based on an analysis of data from the statistics from the of Statistics and Censuses National Institute, from 2005 to 2017.

What stands out in the study is that people with knowledge of English have better working conditions than non-bilingual people of similar age, academic training, and social status, among others.

Regarding the salary issue, the study confirms that, on average an English speaker receives $241 more in their monthly salary compared to a non-bilingual person even though the English speaker works an average of nearly an hour less per week than someone who is not bilingual.

Benefits are different as well. The study shows that bilinguals have 2.5 percent more holidays, 2.7 percent more possibility of have social security and 1.4 percent more aguinaldo (or Christmas bonus) than a non-bilingual person.

Steven Núñez, Labor Minister, said that seeing the results of the study, "we are more clear that we are on the right track to focus our efforts in promoting the study of this second language through the Alliance for Bilingualism (ABi) and with the start of English courses with native teachers from English speaking countries."


English110518.jpg
A.M. Costa Rica wire services photo

Study shows more labor benefits to
English speakers employees.



In August, President Carlos Alvarado presented the study program called Alliance for Bilingualism (ABi) to improve the management of a second language and make more solid alliances with private companies to employ young people.

The Labor Ministry, is giving English courses, to more than 1,000 young people. The first courses were being held in Puntarenas and are provided by teachers from the United States.


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Bohemian Road Trip
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"No Meek Messiah"
The author Paulkovich says Jesus was a mythical-character. From the page 55 (Roman leaders decide they need a god, any viable god, to hold the flagging empire together) and page 61 (in 391AD, Roman Emperor Theodosius elevates Jesus, posthumously, to divinity.)
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"Beyond All Religion"
In that book, author Samuel Butler agrees with the thrust of Paulkovich’s new book, revealing that Christianity was chosen by a vote at the Council of Nicaea in 325 CE over several other contending religions. Sample Sam’s book Click Here
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The Dark Side of Pura Vida: Murder, Betrayal, Abduction and Revenge in the Vacation Paradise
By James J. Brodell
Retired baseball player Jack Patterson becomes suspicious after his younger sister dies in a Pacific Ocean rip tide while on vacation in Costa Rica. Jack has to go there to find answers to troubling questions.
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Life is a Tropical Garden
By Victoria Torley
A quirky look at gardening in the tropics. What happens when a "Northern" gardener moves to Costa Rica? You have no idea.
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Make gifts from dollars or colones
Running out of gift ideas? Author Dusty Pilot has just released easy to follow, step-by-step instructions for turning bills (dollars or colones) of any denomination into unique gifts such as flowers: roses, daffodils, daisies and poinsettias; shirts and blouses, and birds with flapping wings. Preview or purchase at Amazon. Click Here

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Guide to Costa Rican Spanish
By Christopher Howard
This one-of-a kind best-selling Costa Rica Spanish phrasebook will help anyone including older retirees master the basics of using Costa Rican Spanish in real-life situations.
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Sixth news page




Not really spring




One of the things that I love about Costa Rica is that you can have a spring day any time of year. I woke up this morning with a freshly scented spring breeze blowing through the window and the sound of happy birds singing in the trees. So relaxing. I stretched and opened my eyes to look at the clock.

5:17 a.m.?!? I rolled out of bed, slammed the window, closed the blackout curtains and went back to bed. 5:17 a.m., nonsense!

When I woke up again – at a decent hour – spring day was still there. I thought it had been a mirage. It seems that calendar pages fall off the refrigerator (maybe I need new magnets) and it keeps raining or the sun keeps shining. There isn’t a lot to mark the change of seasons especially where we live.

You see, we live at the junction of 5 or 6 microclimates. We have a rainy season and a rainier season. We are inland by Lake Arenal but we get Caribbean storms. It’s enough to drive you mad. What to plant? When to plant? I always want to see what my neighbors are planting but they just keep planting field corn . . .

Enter the greenhouse. Yes, it is primarily for growing orchids but I can start any seeds I want in there and control at least some of the weather. Take tomatoes for example. We love good ripe tomatoes but they are hard to find even at ferias. They are also hard to control. Tomatoes hate wet feet so planting them in the rainy season is a risk.

First, the seeds get washed away and then the roots rot. Plant the seeds in a greenhouse, however, and they go crazy. Let the plants get some height and they can be transplanted to a spot with sun and some cover from the rain. Then it’s just a waiting game.



Six years in Costa Rica and I still don’t have the knack for some things. My friend Mike has melon vines and they grow like crazy. Mine tend to die. Cathy grows huge cucumbers, mine hate me. Theo grew beautiful sweet corn from seeds I ordered from Hawaii, the cows ate all my plants when they were only three feet tall. I don’t even want to think about the caterpillars and the leaf cutter ants.

Anyway, here it is, another beautiful spring day. Maybe I will forget about gardening for a day, go to a nice hot spring and just relax. Sounds like a plan.

Plant for the Week


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Victoria Torley photo

Shade gardens are a delight but now and then they need something to brighten them up and these delightful plants are just the thing to do that. This is Calathea ornata and also comes with a tinge of red. All the Calatheas are great in bright shade (no direct sun) and do well as potted plants on deck or patio. They prefer temperatures in the 65-75 F range and don’t like temperatures below 60 F. Feed lightly during the growing season – April to October - and, if your pot is planted, let the top dry out between waterings.



Editor's note: Victoria Torley, gardener columnist, can be reached at victoriatorley1@gmail.com



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CONTAINER HOMES
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Code:9406-011719


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Vista Verde Del Mar
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* NO PRE-SALE glitches, ready to build on !
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Code: 9350-050419



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House - Apartments For Rent
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Seventh news page


Letter to Readers:
The criminal process in Costa Rica


Dear A.M. Costa Rica Readers:

Costa Rica is a country proud of its political and institutional solidity, and, characterized by having one of the most solid democracies worldwide, it has decided to live its existence traveling on the roads of respect for people´s fundamental rights: the right to life, health, and having private property, and when these rights are violated justice comes to help.

This is a series of articles to inform foreign people of the different guarantees we all have here, and of the nature of the criminal process in Costa Rica. The intention is to provide a small tool that will allow you to defend your rights.

What is a Complaint - a denuncia? A complaint is a document that informs the Public Ministry of the existence of a criminal act (robbery, homicide, fraud, etc.). It´s basically the narration made by the victim herself, or her representative. It has to fulfill a series of legal requirements, among them:  the concatenated and chronological narration of how the facts happened, this is a very important aspect in the complaint, since the accused fact has to be described in the clearest and the most complete way there is, allowing people, who were not present when the fact took place to mentally reconstruct it, which will consequently help the investigation directly in a better way.

Also, if possible, the author´s, the witnesses´ and the victim´s names should be included, although the absence of the last will not stop presenting the complaint. Article 279 of the Criminal Code establishes that the complaint can be make orally or in written, in person, or by means of a representative with Special Power. If the complaint is presented orally, the one presenting it will go before the authorities, either the Public Ministry or the Judicial Police, and at that time an act should be made by the employee in charge of receiving the statement. It is also important to mention that the victim has a series of rights guaranteed in our internal norm in concordance with international treaties. 

But, which are those rights and where are they? They are on title III of Chapter I of the Criminal Process starting in article 71. The intention of this small note is not to transcribe them, but to give the reader a general notion of the guaranties´ magnitude.

Okay, basically, our legislation indicates that victims´ fundamental rights have to be respected and we should see they are not victimized again, and very particularly to consider their special needs, their physical limitations, sensorial, cultural, and social differences, including ethnic differences. Also, the victim has the right to be informed of the decisions taken in relation to the investigation.


    Jail110518.jpg 
A.M. Costa Rica wire services photo


This information should be sent to the victim paying attention to his particularities: if he does not speak Spanish. He has the right of having a translator properly credited, who will be assign when receiving the complaint.

Now, the victim, besides making the narration of the facts together with the requirements previously mentioned, should tell us the way to notify her by giving us her email address or telephone numbers where the authorities could contact her.  Since complaints are in writing, the victim´s attorneys are usually the ones who present them, which is perfectly valid as long as it fulfills with legal requirements.

Once the complaint is finished, what proceeds is that the competent authority evaluates the initial diligence of the investigation, which will depend on the concrete case.

 
By Sergio Castillo Quesada,

Curridabat, San José.





Editor’s note: The views or opinions expressed by the author are the sole and exclusive responsibility of the sender and do not necessarily represent the opinion of A.M. Costa Rica. Therefore, the newspaper does not accept liability for reader's opinion letter content.