REMOVING COSTA RICA FROM THE EU GREY LIST IN OCTOBER 2023

Costa Rica must act quickly if it wants to be removed from the list of non-cooperative jurisdictions for tax purposes of the European Union (EU), where it has been since last February. In October, there will be a new review by the EU to decide whether our country remains on this grey list.

Why is Costa Rica on the list?

According to the EU, the country does not tax residents on passive income earned abroad, which is considered a practice that promotes tax evasion and classifies it as a “tax haven.”

The current government has accused the previous administration of Carlos Alvarado of not submitting a project on time to address this situation, despite being warned since 2021. Recently, the Minister of the Presidency, Natalia Díaz, has called for projects to move quickly in the current extraordinary sessions.

One of the most controversial issues is that the Government’s proposal focuses on increasing taxes as a mechanism to get off the grey list. However, lawmakers claim that there are proposals that can achieve this goal without the need to create new taxes.

Currently, there are three projects in the legislative process with the aim of removing the country from this list: the Government’s initiative, another from the PUSC party, and the third presented by the Liberal Progressive party.

It is essential to pay attention to the final outcome of this bill, as it could bring significant changes and/or expand the concept of subsidiary liability. Being informed about any modifications that could affect partners and legal representatives of companies is crucial since it would directly impact their responsibility regarding the company’s tax debts. Staying updated on legislative developments is paramount to make informed decisions and adequately prepare for any scenarios that may arise.