The main private sector union in Costa Rica has agreed to form a technical team together with the government to create a database of corporate shareholders.
The Costa Rican Union of Chambers and Associations of Private Enterprise (Uccaep) agreed with the Government of the Republic to form a team (including tax and computer experts) to assess the conditions for creating a database of shareholders, reported Nacion.com.
Along with 31 other countries Costa Rica has signed an international agreement that supports the automatic exchange of information on multinational companies.
From a press release issued by the OECD:
27/01/16-As part of continuing efforts to boost transparency by multinational enterprises (MNEs), 31 countries[1] signed today the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports.
As the region gets ready to start complying with the US law FATCA, OECD countries are already working on a Single Global Standard for automatic exchange of information.
FATCA could now be joined by the European OECD countries Single Global Standard for Automatic Clearing of CRS Information (Gatca), "... allowing tax information on their residents to be shared between them."
The agreement provides for the exchange of financial account information, including balances, interest, dividends and profits from sales of financial assets, both for individuals and corporations.
From a statement issued by the Ministry of Finance in Costa Rica:
COSTA RICA signs multilateral agreement on automatic exchange of information with OECD
The asymmetry of investment flows makes the application of the concept of world income inevitably generates more revenue to the states of powerful economies than those of small ones.
In his opinion piece in Elfinancierocr.com, Manrique Blen points to the difficulties that countries with small economies face when they sign double taxation treaties, as, depending on the characteristics of the signed agreements, they can stop receiving tax revenues that they could have received had they not joined the treaty.
The aim of the Agreement is to exchange information between the two countries for the administration and enforcement of tax laws.
From a press release by the Ministry of Foreign Affairs of Costa Rica:
Costa Rica and Ecuador have signed an Agreement on the Exchange of Information in Tax Matters, with which the country moves forward in its fulfilment of the commitments made in 2009 with the Organization for Economic Cooperation and Development (OECD).
Straddling two administrations, Costa Rica has a huge task ahead of it in terms of institutional adjustments, taxes and regulations, in order to be a candidate for membership in 2015.
Elfinancierocr.com reports that Costa Rica "is being forced to take on a series of standards and policies of the highest level that the Organization for Economic Cooperation and Development (OECD) requires its members".
The agreement includes the exchange of information on request, automatic exchange, simultaneous tax examinations and assistance in the collection of tax debts.
Costa Rica has deposited its instrument of ratification of the Convention on Mutual Administrative Assistance in the field of taxation, the broadest multilateral agreement ever regarding tax cooperation and information exchange.
The new standard adds control instruments and powers for the Ministry of Finance, regulating the lifting of banking secrecy by court order.
The new plan also proposes agreements to exchange tax information between the country and other nations, with the government aiming to removing Costa Rica from the gray list of the Organization for Economic Cooperation and Development (OECD).
Adherence to the Multilateral Agreement involves sharing tax information with 23 countries, allowing advances to be made in international transparency policies and the fight against tax evasion.
A statement from the Finance Ministry reads:
COSTA RICA SIGNS INTERNATIONAL TAX COOPERATION CONVENTION WITH 23 COUNTRIES
• Efforts have earned the country’s removal from international list of tax havens
The country known for its canal is making progress toward its objective to sign at least 12 DTA in order to comply with the OECD requirements and come off the organization's list of tax havens.
Signing double taxation agreements (DTAs) has the added benefit that it may make it easier for the countries with which the information sharing agreements are reached to invest in Panama.
As the country progresses in making tax information more transparent, large fortunes seek shelter in the last tax havens, which include Panama and Costa Rica.
As the pressure imposed by the Organization for Economic Co-Operation and Development (OECD) starts to produce results, money keeps fleeing from one place to another, as its owners try to hide it from their tax authorities.
Staying at OECD’s tax-haven lists add fiscal disadvantages for transnational corporations operating in the country.
Costa Rica emerged of the “black list” of the Organization for Economic Co-Operation and Development, but is now in its “gray-list”, after assuming the commitment of negotiating tax information treaties with at least 12 countries. But of the required 12, the country has just one in place with the United States, and is negotiating another with Argentina.
Costa Rica and Guatemala were upgraded to the "Gray List", whereas Panama remains listed as a "Tax Haven".
A September 24th report by the Organisation for Economic Co-operation and Development (OECD), shows progress in the implementation of transparency and fiscal information exchange standards.
Panama remains cataloged as "a tax haven committed to adopt international fiscal standards, but who has not implemented them substantially".
Costa Rica will make modifications in its legal system to avoid the penalties proposed by the G20 for countries that do not exchange information on taxes.
Finance Minister Guillermo Zúñiga agreed that the issue of transparency in tax matters and the international exchange of tax information, although it was raised for years, was recently priorized due to the recent decision by the G20 to recommend sanctions against countries that do not cooperate in this regard.