Costa Rican citizen using Transferwise - Taxing?

[armdom64]

Hello folks,

I'm a Costa Rican citizen living in the country. I'll start receiving a salary from a US-based company under a scheme that I really don't understand. I was thinking of providing them with a Transferwise IBAN to receive the money. Am I subject to taxes in CR? Would TransferWise report this? How can I prove to transferwise that these are legal funds that they shouldn't freeze? For this latter matter, is it enough that the funds are coming from a completely legal entity in the United States?
My intentions are to hold the money on the platform and move in smaller amounts to accounts in other countries.
Also, is this something you would recommend doing? I've used transfer wise for very small transfers from CR-US-Russia and works great, but I've heard of people having their money withhold for some time.

I appreciate your input.

AD64

 

[Tr0nad0r]

I'm not familiar with tax laws in CR but I guess it must not be that different than the laws in other countries of LATAM, so I'll share my experience working as a contractor for a US company from LATAM.

For a US-based company probably is better to provide your USD Wise account details, then you can transfer to your local account as CRC or accounts in other currencies.

You're subject to taxes in CR since you are living there, even if you don't move funds to the country you must declare it. Wise's partner bank (Community Coastal Bank) probably reports it to IRS anyway and IRS shares it with the tax agency in your home country. Also, the company might ask you to provide a filled W-8BEN document that states that you're a non-resident and you aren't subject to US taxes and share this with the IRS as well.

If Wise ask for proof of funds you should show your payslips/invoices or contract signed with the company then they can verify that the amounts that you receive in your account are the same as the specified in your provided proof documents.

 

[armdom64]

Thank for your comment, guilleiguaran. And what if one transfers directly into accounts in countries like Georgia and Russia? Would that make sense?

 

[Tr0nad0r]

Russia share information with Costa Rica as well (you can find it here: Exchange relationships - Organisation for Economic Co-operation and Development)

Georgia not yet (Georgia commits to implement international standard on automatic exchange of financial information by 2023 - OECD) but when they start to do it might be retroactive (meaning that if you use an account today it might be reported to CR in 2023)

You might be interested in this topic: Which non-CRS country would you recommend for a bank account ?

 

[Vampp]

Transferwise is not a bank, but a non banking financial institution.

They are required to do your KYC only after 150K Eur a year.
They don't report anything they shouldn't to anyone. I personally used them for years, not issues whatsoever, not reports no nothing. This does not mean it won't change, but if you are less than 5k a month and the Costa Rica financial institutions won't run after your 25k worth car, you should be safe.

You could make a Belize IBC to own that TW account or a Wyoming LLC and you are a free man no matter what.

Hope i helped you.

 

[Jade33]

Hello folks,

I'm a Costa Rican citizen living in the country. I'll start receiving a salary from a US-based company under a scheme that I really don't understand. I was thinking of providing them with a Transferwise IBAN to receive the money. Am I subject to taxes in CR? Would TransferWise report this? How can I prove to transferwise that these are legal funds that they shouldn't freeze? For this latter matter, is it enough that the funds are coming from a completely legal entity in the United States?
My intentions are to hold the money on the platform and move in smaller amounts to accounts in other countries.
Also, is this something you would recommend doing? I've used transfer wise for very small transfers from CR-US-Russia and works great, but I've heard of people having their money withhold for some time.

I appreciate your input.

AD64

Little off topic but how's it going in cr? Are there tourists? I was looking at beach properties, there seems to be a lot for sale for a long time, do you notice a big sell off in the foreign property market? Thank you

 

[Vampp]

Little off topic but how's it going in cr? Are there tourists? I was looking at beach properties, there seems to be a lot for sale for a long time, do you notice a big sell off in the foreign property market? Thank you

I was looking for property investments in Eastern Europe also.

Everything raised soo much, especially construction related. I'm keeping stocks currently, maybe thinking of going ART.

I would advise against real estate, due to high inflation we are very tempted to invest with everything on high prices, it may go higher and probably will but from this point on we can see another 2008 anytime. It can be by the end of the year it can be in 5 years.
So unless it's a short buy/sell, middleman type of deal, IMHO stay away.

For some reason I have the feeling it's the same in all parts of the world.
Either we go back a little ( before wood went up 400% ), either the new normal is like Elon Musk's 50k house.
I would think outside the box and invest in some 3D printing real estate technology.

By the way all the above are my personal opinions, thinking outside the box opinions, please research it more and maybe create a new topic with this info.

 

[DavidS]

Is transferwise still not reporting CRS? And which bitcoin exchanges do they work with?