5 Green Reasons Costa Rica Is the Poster Child of the Environment 6 years ago
Have You Tried Guanacaste’s Fastest Growing Sport? 6 years ago
Was Your Costa Rican Bank Account Closed? 6 years ago
Latin America Investment News on Viva Tropical

Heavy Consequences Come with Tax Reform in Costa Rica

Article Summary:

In order to remove banking secrecy in Costa Rica all that is needed is for the required information to be used appropriately to determine compliance with tax obligations. However, two recently approved tax bills, the Law for Strengthening the Tax Administration and the Law on Fiscal Transparency, hold the potential to be abused and arbitrarily applied, causing tax collection to be irregular and ineffective.

Photo Credit: Hispanically Speaking

Original Article Text From Nacion via Google Translate :

The Good and Bad of Tax Reform

This July 30, unanimously, the Legislature approved in first debate two projects that contain tax reforms of great importance: Bill to Strengthen Tax Administration and the Fiscal Transparency Project. Let’s make a brief analysis from different points of view.

Transparency in the project, the possibilities are relaxed Administration’s request, financial institutions, tax information importance of customers, both passive and active. Very specifically, it is not necessary that there is serious evidence of commission of an illegal tax, it is sufficient that the information is foreseeably relevant to the determination of compliance with tax obligations. And information means foreseeably relevant for tax purposes that is sought within the framework of an international exchange of tax information, or which, in a supervisory procedure, requested to verify or determine compliance with the formal tax obligations and materials.

As regards the strengthening project, the axes are three: modifying administrative penalties, allowing the imposition of higher fines, and holding the imprisonment to more serious offenses; modification of the administrative procedure for determining the required , highlighting its inception through a determinative act-and not the act known as Charge-transfer and the obligation to pay or bail contesting for access to the system. This means a short cut in administrative and disbursement of taxes or security discussed. And thirdly, substantial changes to regulations related to the regime of solidarity among taxpayers, prescription-increased to 4 years to 6, in case of failure-recovery powers, among others.

The amendment also contains a new chapter of taxpayer guarantees, and a significant change to the General Customs Law, which emphasizes, in positive terms, the legalization of the adjustment procedure, hitherto on the basis of the regulation and rationalization some sanctions. The good: apart from demonstrating that some agreement can be reached by the Assembly, may be considered positive the message to clarify the scope of the weapons available to the Administration to encourage voluntary compliance with tax obligations and to combat tax evasion – in that order.

The worst, which did not exist the same level of commitment and maturity to implement other substantive reforms to the laws that protect the taxes, so that there is balance between the serious-now-powers of the Administration, for clarity and modernity rules establishing the essential elements for the birth and quantification of different tax burdens.

More particularly, although outside the scope of this outline, many technical inaccuracies and ambiguities in the construction of the reformed rules, regulations and excessive referrals, generating many potential abuses and arbitrary.

Link to Original Article:

From Nacion

Latin America Investment News on Viva Tropical