My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions
Subject: Capital Gains Tax
Expert: taxman at centa.com
Date: Friday November 04, 2005
Time: 02:19 PM -0800
QUESTION:
Would there be any tax/capital gains implications to a Canadian citizen and
resident who has sold a Costa Rican home for a profit of about $30,000.
Costa Rica requires individuals buying property, automobiles, etc to set up
a corporation therefore the property is purchased under a corportation name.
-------------------------------------
david ingram replies:
If you are a Canadian resident (could be an Ethiopian, Italian or any other
nationality living in Canada), the sale of A Costa Rican property is taxable
whether in your name or in the name of a Costa Rican Corporation that you
control.
That is because any Corporation controlled by Canadian residents is taxable
in Canada on its income UNLESS it has FIVE FULL TIME employees who are NOT
related to the Canadian owners.
The same is also true of American Residents with a Costa Rican Corporation.
In their case, if they do not file US form 5471
ANNUALLY to report the mere "existence" of a foreign corporation, "EACH" US
shareholder with 5% or more o f the outstanding shares is liable for an
annual fine of up to $50,000 per year. O U C H !!!!
Answers to this and other similar questions can be obtained free on Air
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