June 11th, 2014 (InsideCostaRica.com) Beginning on July 1st, Costa Rican banks must comply with the Foreign Account Tax Compliance Act, known as FATCA.
The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that requires United States persons, including individuals who live outside the United States, to report their financial accounts held outside of the United States, and requires foreign financial institutions to report to the Internal Revenue Service (IRS) about their U.S. clients. The US Congress enacted FATCA to make it more difficult for U.S. taxpayers to conceal assets held in offshore accounts and shell corporations, and thus to recoup federal tax revenues.
Beginning on July 1st, Costa Rican banks and financial institutions must provide the IRS the names of their U.S. citizen account holders, as well as tax ID numbers, addresses, account balances and their financial transactions.
The implementation of FATCA in Costa Rica comes after the signing of a memorandum of understanding signed with the United States in November of last year.
Many banks around the world have opted to cease doing business with US citizen customers rather than comply with the legislation, which many banks feel is burdensome.