Financial System: Bonds in Costa Rica

The official notice obliging all entities of the country's financial system to provide the tax authorities with information on the bank accounts of all their foreign clients was published in the Gazette.

Tuesday, August 11, 2020

According to official letter No DGT-R-16-2020 entitled "Resolution on due diligence for the provision of information corresponding to the standard for the automatic exchange of information on financial accounts: Common Reporting Standard (CRS), in relation to financial and non-financial entities", which was published in the Official Gazette on August 5, institutions are required to report the information to the General Directorate of Taxation, an agency of the Ministry of Finance.

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"That in order for the Tax Administration to comply with the implementation of this information exchange modality, it is considered essential to establish the definitions, general obligations to report the information, due diligence procedures for the accounts of individuals and legal entities as well as the conditions and compliance deadlines to be complied with by the entities required to provide the information, in addition to the effective application referred to the financial accounts as established by the CRS and its comments", the document explains.

German Morales, managing partner of Grant Thornton Costa Rica, explained to that "... the side must inform, every December, how much is the balance of the current account that the foreign person has here. It is intended to be reciprocal, for example, if a Costa Rican opens an account in Mexico, it is reported from there. Then, Taxation will have the current accounts of the Costa Ricans abroad."

Morales added that "... The bank must inform, every December, how much is the balance of the current account that the foreign person has here."

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These new obligations arise after the Costa Rican government, by adhering to the Declaration on Automatic Exchange of Information on Fiscal Matters of the Organization for Economic Cooperation and Development (OECD), committed to implement the Automatic Exchange of Information corresponding to financial accounts, called Common Reporting Standard.

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