DEPUTIES APPROVE SECOND DEBATE OF THE PROJECT TO REMOVE COSTA RICA FROM THE EU GRAY LIST

The majority of deputies voted in favor of bill 23.851 in its second debate. This bill aims to modify the income tax in order to remove Costa Rica from the European Union (EU) gray list regarding tax cooperation. However, the debate focused on the controversy over using the bill to change the local tax situation instead of addressing the urgency of removing the country from the EU gray list.

The ruling faction of the Social Democratic Progressive Party (PSD) and the Broad Front (FA) tried to return the bill to the first debate, but this motion was defeated. Most deputies, including the National Liberation Party (PLN), the Social Christian Unity Party (PUSC), the Progressive Liberal Party (PLP), and New Republic (NR), voted in favor of the bill.

Removing discretion in the collection of extraterritorial income tax

The bill seeks to eliminate discretion in the collection of extraterritorial income tax from large companies to comply with EU requirements. However, opponents argue that this would amount to forgiving millions of dollars in taxes for large companies and would result in significant fiscal losses for the country.

The debate also focused on whether Costa Rica should change its territorial tax model to a global one. Despite the controversy, the bill passed the second debate and could ultimately lead the government to consider using the veto resource. Although the final vote did not garner as many votes as the motion to return it to the first debate, uncertainties remain about the future of the bill and the possibility of a presidential veto.

The key issue now is the possible reselling of the bill currently converted into law, which would require 38 votes, a figure that was not reached in the second debate, as the president partially vetoed the law passed in congress.