March 7th, 2013 (InsideCostaRica.com) Costa Rica will begin a new tax information sharing system for both companies and individuals based in the country. The information will be shared with the United States and scores of other countries including the United Kingdom, Germany, Spain and France.
The Convention on Mutual Administrative Assistance in Tax Matters was published in the official Gazette on Tuesday, and the data sharing will begin in three months.
The approval of the agreement was one of the commitments Costa Rica made with the Organization for Economic Cooperation and Development (OECD) in order to be removed from its list of tax havens.
The agreement provides for the possibility of simultaneous tax audits. Officials from other countries may even be present when companies or individuals are audited here, and will have full access to bank records and financial statements of their citizens and foreign-owned companies.
Bank account information – including notifying tax authorities in the person’s home country when a person opens a bank account here – and information about property owned by foreigners in Costa Rica will also be shared with officials from their home countries.
The goal is to prevent the rise of “the potential for tax avoidance and evasion,” the document reads.
Carlos Camacho, President of the Camacho Group, gives an example: “The agreement means that authorities in Spain could come to Costa Rica to conduct audits, with their local counterparts, of companies with fiscal interest in Spain.”
The agreement reinforces the new powers given to the Treasury by the Fiscal Transparency Act, passed last September.
“Costa Rica will provide requested information from tax returns to bank accounts,” explained Randall Madriz, a lawyer specializing in tax law.