The Ministry of Finance has announced that tour operators and travel agencies are not subject to the 2% deduction relating to advanced income tax payment on credit card transactions.
From a statement issued by the Presidency of the Republic of Costa Rica:
The Ministry of Finance today reported that at the request of the representatives of the tourism industry, the General Department of Taxation review the status of tour operators and travel agencies and exclude them from withholding money, on the grounds that these two activities in the tourism sector supported the request with their technical studies which were reviewed by the Tax Administration Office. This exclusion does not include the hotel industry.
The new rules governing prices agreed by two companies when transfering goods, services or rights between them are now in force.
"The new rules will fill a legal vacuum which created uncertainty for taxpayers and will satisfy a requirement of the tax administration in light of operations of multinational companies", noted an article in Elfinancierocr.com.
In order for transfer pricing rules not to affect foreign investment, double taxation should be prevented.
According to Jose Antonio Saborio in his article in Elfinancierocr.com, it is not that transfer pricing rules (NPT) scare off foreign investment, "... rather they provide greater security to multinationals interested in investing, especially if the country has an extensive network of agreements to prevent or minimize double taxation (DII), which will allow two or more countries to discuss their differences on NPT, when the application of the latter leads to DII ".
The regulation currently being processed aims to regulate the sale prices of goods and services between related companies.
"... the Executive power has introduced a bill, which is being processed by the legislation, called the Law on Control of Fiscal Evasion, which includes a chapter on this subject, which is virtually a decree, with the addition of specific sanctions for breaches of duties set out in the bill," says Ana Elena Carazo in Elfinancierocr.com.
In Costa Rica, the new tax law increases the penalties for mistakes and omissions in income tax statements.
Effective from September 28, the Law for Strengthening Tax Management and Law for Enforcing Standards of Fiscal Transparency in some cases doubles fines to be paid for misreporting.
Errors without malice will be subject to a penalty of 50% of the unpaid amount, when it used to be 25%, while omissions or mistakes with bad intentions will incur fines of 75% to 100% for so-called "serious behavior" and 150% on those denominated "very serious behavior."
In Costa Rica there is no specific rule in tax law to define the formation, conduct and consequences of being a "economic interest group."
An article by Carlos Camacho points out some of the considerations that the taxpayer must keep in mind regarding the consequences of being defined as an "economic interest group", even though there are no specific regulations.
Advances have been made in the process to implement mandatory use of electronic invoicing from the second half of 2012.
Electronic invoicing has been used since February 2009 when the Directorate General of Taxation issued a resolution that enabled and set out the rules for its use. However, its generalization is a process that has been progressing slowly.
Bill aims to make public the names of people and companies that are in arrears in the payment of taxes in Costa Rica.
The bill is being sponsored by the Frente Amplio in the Costa Rican Legislative Assembly and has the support of MPs from different benches and even the Executive.
Under the reform, " information about the names of individuals and legal entities that have tax debts to the Treasury, and the amount of such debt will be publicly accessible," reported Nacion.com.
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