Expat Living in Costa Rica: Money Matters - HRG Costa Rica Vacations
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Expat Living in Costa Rica: Money Matters

Costa Rica High Resolution Finance Concept

Taxes, social security, and other financial matters for expatriates in Costa Rica

Now that you’ve decided to buy real estate in Costa Rica and move here, you’ll need to know a few things about managing your finances as an expatriate. Your understanding of financial and tax-matters is the key to a stress-free expat life in Costa Rica. Here are the basics, but it’s always a good idea to consult a qualified tax professional who is well versed in US and Costa Rica finances and taxation.

Taxes in the US and Costa Rica

U.S. citizens must continue to file U.S. returns and report all income, regardless of country of origin. You may need to file additional forms to report non-U.S. income. Americans living outside of the U.S. have until June 15 to file, with an October extension. H&R Block has a great division for expatriates living abroad. Whether it’s been years since you’ve filed because you were living abroad, or you’re getting ready to move and just want to know so you’re prepared, their experts can help.

If you earn money in Costa Rica, you’ll need to know a few things about how the system works here. The tax year runs October 1 through September 30. If you work and have a fixed income, you have monthly withholding. Dependent and other tax credits may apply to the tax bill. To learn more about dealing with your taxes in Costa Rica, check out Costa Rica taxes Costa Rican-source income.

Income from profit-generating activities also requires withholding. Spouse and dependent tax credits apply to the tax balance. When both parties (spouses) are taxpayers, only one party can claim dependent tax credits.

If you don’t file a tax return, you will be imputed income using the base salary of a mid-level government employee and published in the annual budget as a guideline. Professionals, such as doctors, architects, lawyers, etc. can incur 335 times base salary if they don’t file tax returns. For other professionals and technicians, the imputed salary is 250 times base salary.

U.S. Social Security Benefits

Retirees living in Costa Rica can continue to receive their Social Security benefits, including spouse and dependent benefits, which are subject to U.S. taxes. It may be possible to have your monthly benefits deposited directly to your Costa Rican bank account. If you are under your full retirement age (65-67) and work more than 45 hours per month, it may affect your benefits, and your spouse’s or dependent’s benefits.


Only legal Costa Rican residents may open bank accounts; a savings account is usually the easiest type to open. Be aware that Costa Rican banks report offshore account information to the Internal Revenue Service. To open an account, you will need some or all of the following documents:

  • Passport and residence permit
  • Proof of address—utility bill, rental agreement, etc.
  • Two letters of reference
  • Initial deposit: CR ç3,000 – CRç25,000 (approximately US$10 – US$500)
  • U.S. tax forms (annual requirement)
  • A letter of reference from your bank in the United States

You’ll also need patience; lines are long and move slowly. Even a seemingly insignificant discrepancy may require additional documentation or incur delays. State-run banks tend to be less user-friendly; private banks are more likely to have English-speaking staff.

Many Americans in Costa Rica maintain their U.S. bank accounts for convenience; a U.S. debit card works at most ATMs, but withdrawal and foreign merchant transaction fees quickly add up. International money transfers are subject to reporting restrictions; banks are required to report transfers of $10,000 or more. Consult your bank about monthly transfers. In addition, there are “know your customer” requirements in the U.S. and Costa Rica to combat money-laundering and other illegal transactions.

The best advice is to seek council from your CPA, tax attorney, or other qualified professional in the U.S. and Costa Rica. In the post-9/11 world, global financial transactions can be complicated.

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