Tax Data: Agreement Between Costa Rica and the U.S.A.

In order to update the Intergovernmental Agreement for the Effectiveness of the Tax Compliance Law on Foreign Accounts, signed by both parties in 2013, the governments of both countries signed a complementary agreement to FATCA.

Tuesday, August 25, 2020

According to the Ministry of Finance of Costa Rica, with the subscription of the complementary agreement, the legal basis of the FATCA (Foreign Account Tax Compliance Act) will be updated with the provisions of the Agreement with the Government of the United States of America for the exchange of information on tax matters, which will enter into force next September.

The document dated August 24, 2020 states that "... Through the FATCA Act, the United States established the obligation for financial entities to provide, through automatic exchange, information related to certain accounts and financial products of U.S. account holders and that would be of interest for tax purposes."

"Financial entities that do not comply with this report will be subject to a 30% withholding tax, applicable to various payments from the U.S. to their clients," the statement explains.

The signing of the FATCA Agreement seeks to maintain the current standard of tax transparency established by the Organization for Economic Cooperation and Development (OECD), regarding the exchange of information for tax purposes and mutual assistance, concludes the official announcement.

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More on this topic

Panama Signs Agreement to Implement FATCA Law

April 2016

The agreement signed with the United States states that exchange of information will be done between the tax administrations.

From a statement issued by the Ministry of Economy and Finance (MEF):

Panama and the United States signed today the Intergovernmental Agreement (IGA) between the two countries for the implementation of the Foreign Account Tax

Honduras Signs Agreement on FATCA Law with U.S.

April 2014

Movements in the bank accounts of U.S. citizens residing in Honduras will be reported to the Treasury Department of the United States.

The Law on Foreign Account Tax Compliance (FATCA) is a U.S. law that requires citizens of that country, including those living abroad to provide information regarding money held in bank accounts outside the United States by requiring foreign financial institutions to report to the Internal Revenue Service (IRS) about their U.S. customers. The U.S. Congress enacted this law to make it harder for U.S. taxpayers to hide assets and shell companies held abroad, in order to prevent tax evasion.

U.S. Defers Enforceability of FATCA

July 2013

The fulfillment of the obligation to report on foreign bank accounts belonging to U.S. citizens has been postponed to July 1, 2014.

This was announced by the U.S. Treasury through a statement, explaining that "due to the huge interest from countries around the world" the deadline to comply with the Law on Foreign Account Tax Compliance (FATCA), will be extend by six months, that is until July 1, 2014.

The Truth About Foreign Account Compliance Act

January 2013

Government to government agreements simplify compliance with the rule that seeks transparency in the finances of U.S. citizens abroad.

Elfinancierocr.com reports that "the Foreign Account Compliance Act (FATCA) is a reality and the truth is that to date, there are very few financial institutions in our region who are prepared to meet the requirements of this U.S.

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