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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Costa Rica

This report for Costa Rica has been published on 5 Apr 2012. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is not in place.   An EIRL is only required to file the name of the manager at registration; therefore unless the manager and owner are the same person, ownership information on an EIRL may not be available.  Costa Rica should ensure that ownership information on EIRLs is available. 
Although a trustee of a foreign law trust would be liable to tax on Costa Rican source income of the trust, there are no requirements for the trustee to maintain ownership information.  Costa Rica should take measures to ensure that information is available that identifies the settlor and beneficiaries of foreign trusts. 
There are no express penalties in place for companies and partnerships that fail to register or update registration information. In addition, there is no penalty for a company that fails to maintain a share register.  Costa Rica should put in place effective enforcement provisions to ensure the availability of information for companies and partnerships. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is not in place.   There is no mechanism to enforce the accounting record requirements in the Commerce Code.  Costa Rica should implement a mechanism to ensure that reliable accounting records are kept for all relevant entities consistent with the international standard. 
Costa Rican legislation does not ensure that reliable accounting records or underlying documentation are kept for foreign trusts which are administered in Costa Rica or in respect of which a trustee is resident in Costa Rica.   Costa Rica should ensure that all relevant entities and arrangements maintain accounting records, including underlying documentation.  
Underlying documents are only required to be kept for 4 years pursuant to the Commerce Code, not 5 years as required by the international standard and accounting records generally are only required to be retained for 4 years after the end of operations, not 5 years.  Costa Rica should ensure that accounting records, including underlying documents, are required to be kept for a minimum of 5 years. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is not in place.   The Costa Rican authorities cannot access bank information without an order from a criminal judge, which is only obtainable by showing evidence of an unlawful act, the taxpayer’s name and identification number and that the taxpayer could have been subject to an audit pursuant to the National Audit Plan.  Costa Rica should ensure that it has the power to obtain information held by banks and other financial institutions pursuant to a request from a treaty partner. 
The Costa Rican authorities may not be able to access ownership, identity and accounting information when the information is not relevant to taxes in Costa Rica.  Costa Rica should ensure that it can obtain ownership, identity and accounting information notwithstanding that it may not need the information for its own tax purposes. 
Costa Rica’s attorney-client privilege standard is overbroad and could impede access to information.  Costa Rica ensure that its attorney-client privilege standard it is limited to communications between an attorney and client and to a lawyer acting in his/her legal capacity. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is not in place.   Because of a lack of legislative powers to overcome bank secrecy in Costa Rica’s domestic laws and a possible domestic tax interest requirement, its treaties cannot be considered effective.  Costa Rica should amend its domestic laws to allow for effective EOI. 
One of Costa Rica’s agreements does not meet the international standard as it is specifically limited to tax fraud.  Costa Rica should work with its treaty partner to improve the treaty to ensure that it is consistent with the international standard. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is not in place.   Costa Rica does not have any exchange of information mechanisms in force to the standard.  Costa Rica should ensure that it gives full effect to the terms of its EOI arrangements in order to allow for full EOI to the standard with all of its relevant partners.  
  Costa Rica should continue to develop its EOI network with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.