Expat Community > Colombia

CAB
Joined 2008
Posts: 240

Countries that do not tax worldwide income

1 year ago

I have always understood that Costa Rica, Nicaragua,Panama and Ecuador do not tax worldwide income and waelth.
Is it still true? I know CR does not today but who knows tomorrow.
I found this article interesting.
Ecuador obviously has access to worldwide data.

Everything one owns has to be reported. “This includes all your assets, such as cash, CDs, property, land, vehicles, and investments,” said Figueroa. “When you come to Ecuador, you have all of these benefits. But you also have obligations.”

Food items are not taxed, so there is no IVA refund to be had for people 65 years old and older.

Figueroa emphasized that it is important to report all assets from around the world. “I have a client who only reported her assets in Ecuador. That ended up getting her in trouble,” said Figueroa. “You have to justify the change from year to year. She now has a huge discrepancy.”

A big misunderstanding by many expats is double taxation. “There is no treaty between Ecuador and the United States concerning double taxation,” said Figueroa. “There is only an agreement to share tax and financial information between the two countries.”

That is why an American’s Ecuadorian financial institution will ask for a U.S. Taxpayer Identification Number or Social Security Number so that it can comply with the Foreign Account Tax Compliance Act (FATCA) requirements.

Not reporting assets has gotten expats into trouble with the Ecuadorian version of the Internal Revenue Service. “I have seen people notified by the SRI,” said Figueroa. “A penalty for not filing is $30 to $1,500.”

Prepared foods are taxed. Currently, the IVA (sales tax) is 12 percent.

The 34-year-old accountant added some expats are afraid to reveal their assets. “It is all online. That includes your property, all of your purchases made in Ecuador using the cédula number,” said Figueroa. “The sales tax shows where you have spent your money.”

cuencahighlife.com/understand-your-tax-obligations-in-ecuador-ignoring-them-can-get-you-into-trouble/

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Countries that do not tax worldwide income

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