Costa Rica and then United States have revised the tax information exchange agreement that dated back to 1990. The new law was approved by the Costa Rican legislature on October 29, 2019 and is now in effect as Law 9749.
The object of the law si for each country to “…… provide mutual assistance through of the exchange of information foreseeably relevant for the administration and application of the internal legislation of the Parties with respect to the taxes included in this Agreement. This information will include information that is foreseeably relevant for the determination, liquidation and collection of said taxes, for the collection and execution of tax claims, or for the investigation or prosecution of tax matters….
In order to conduct tax investigations the new law grants the power to the tax authorities of each country to be able to enter the country and conduct tax inspections:
Tax inspections abroad
1. A Party may allow representatives of the other Party to interview people and inspect documents in the territory of the Party mentioned above with the written consent of the persons involved. The competent authority of the aforementioned Party shall notify, in a reasonable period of time prior to the meeting, to the competent authority of the Party mentioned first the time and place of the meeting with the individuals involved
2. At the request of the competent authority of a Party, the competent authority of the other Party may allow representatives of the competent authority of the Party mentioned first to be present at the time it proceeds during a tax inspection in the Party mentioned in second place.
3. If the request referred to in paragraph 2 of this article is accessed, the competent authority of the Party conducting the inspection shall notify, as soon as possible, the competent authority of the other Party of the time and the place of inspection, the authority or the official designated to carry it out and the procedures and conditions required by the Party mentioned first for the development of the inspection. The Party conducting the inspection shall make all decisions regarding the development of the inspection.
The law expands the authority of each party to the agreement to obtain and provide upon request the following information and documentation:
(a) information held by banks, other financial institutions and any person acting in a representative or fiduciary capacity, including designated and fiduciary agents; and
(b) information relating to the ownership of companies, associations of persons, trusts, foundations, “Anstalten” and other persons, including, within the limitations of Article 2 (Jurisdiction), information on ownership of all persons that make up a chain proprietary; in the case of trusts, information on trustors, fiduciaries and trustees; and in the case of foundations, information of founders, members of the foundation council and beneficiaries.
The full text of the law (spanish) is included in this link : Tax Information Exchange Agreement
