Offshore Banks To Lose
Their Tax Advantage
The Banco Central de
Costa Rica (BCCR) -
Central Bank - wants to
put the brakes on "off
shore" banks operating
in the country by
attempting to remove the
15% tax exemption on
monies earned by the
bank from interest on
loans to Costa Rican
nationals.
Francisco de Paula
Gutiérrez, president of
the BCCR, confirmed that
a bill has been sent to
the Legislative Assembly
for the tax change.
The current legislation
controlling offshore
banking requires the
banks to pay a flat tax
of us$125.000, an amount
lower than the tax paid
by local banks. The
current law also
provides that certain of
the 221 local banks not
pay the tax, based on
criteria defined by the
Banco Central.
The bill sent to the
Legislature would
eliminate the article
that allows for certain
banks not to pay the
tax, a move by the BCCR
to discourage offshore
banks in Costa Rica say
they do not fall under
the control and
supervision of the Banco
Central.
If the bill proposed by
the Banco Central is
passed it would required
offshore banks to pay
the 15% tax, increasing
operating costs and
would certainly affect
the interest rates on
loans offered the
offshore banks and
eliminating the
advantage they have over
local banks.
According to the Banco
Central president, the
move is to "level" the
playing field.
Some of the banks that
would be affected by the
proposed legislation are
Scotiabank, Bac San
José, HSBC and Banoc
Cuscatlán. |
|
