Condo ownership could harbor unexpected pitfalls

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Gated communities in Costa Rica are double-edged swords.  They usually give residents more security, but take away individual rights at the same time.  Ley 7933, Ley Reguladora de la Propiedad en Condominio, or the law to regulate condominium property, is to blame.

The problem: The voting rights of condominium associations. Article 27 of the law dictates 100 percent membership approval to change any article of incorporation or bylaw. This fact clearly violates the democratic principle that establishes the interest of the majority outweighs the minority. Years back, the Sala IV, Costa Rica’s constitutional court, upheld this inequity in the law, stating it was proportional and reasonable.

The owners in condominiums make up the homeowner's association. Elected officials from within the group lead it. This group can tweak little things of common interest to the whole group, but cannot change anything of consequence. In some cases, developers hang on to many votes and sway the voting even on the little matters.

Costa Rican law requires three legal books for this association: 

Companies are still on the hook for illegal tax

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Many Ticos and expats believe the law that assesses a yearly tax on companies in Costa Rica is dead because of a recent Sala IV ruling that found parts of it unconstitutional. Some people are still years behind in their payments and are not a bit worried.

They should be. The law is still alive. The Registro Nacional still is entitled to dissolve any company with three consecutive periods in arrears. The agency has the power to assess any past due amounts against any assets of the company.

Cloud accounting a boon for expats and snowbirds

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Times are changing. Cloud accounting is here and here to stay. It is scalable, cost-effective, and easy to use. This is great news for expats, tourists, and locals alike. 

Cloud accounting means freedom. Freedom to roam the world while monitoring one’s financial matters and business endeavors. It is nothing more than using software and services in the cloud via the Internet. 

Software as a Service—commonly referred to as SaaS—can be the key to keeping up with Costa Rica’s fast changing tax regulations. Especially useful for those expats trying to manage a Costa Rican business from some other part of the world. 

Many expats renting their second homes and short-term rentals here are not collecting and remitting sales taxes as required by law.  Ticos working in San José with vacation homes in other parts of the country are culprits too. Others do not pay income taxes if they make a profit in a business venture.  

Some are willing tax evaders, many others just find keeping up too difficult because they find accounting tedious.