The new tax to public-servant employee pensions or those included in the government budget, exceeding $3,949, a so-called luxury pension.
/ A.M. Costa Rica wire services photo
Published Tuesday, July 21, 2020
New luxury pension tax required
By the A.M. Costa Rica staff
Starting in July, the Ministry of Finance has applied the new tax to public-servant employee pensions or those included in the government budget, exceeding $3,949, a so-called luxury pension.
According to the Ministry, the luxury pension taxes only apply to those who are paid with budgets from the National Directorate of Pensions, the Board of Pensions of the National Teaching Organization and the Ex-Presidents Regime.
The new tax applies after the approval of Law No. 9796, known as Law to Redesign and Redistribute the Resources of the Special Solidarity Contribution.
"This tax will be automatically applied to 3,815 pensions whose payment is made from the national budget, which will generate savings to the Public Treasury of approximately $1,548,252 per month," said Elian Villegas, Minister of Finance.
The Law also modified the maximum limits and the amounts exempt from pensions. Previously the tax applied on luxury pensions higher than $6,881.
The new tax is calculated according to the amount of the pension. For example, a government luxury pension between $3,949 to $4,937 must pay a 25% tax based on the over exceeded amount of $987.
The full table of luxury pension taxes can be reached on the website for the Ministry of Finance.
Should the government create new taxes on public employees with luxury wages as well? We would like to know your thoughts on this story. Send your comments to email@example.com
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