Costa Rica amends CRS record-keeping and reporting requirements for FIs

Wednesday, 14 September 2022
The Costa Rican tax authority has amended the due-diligence and reporting requirements for financial institutions (FIs) in the country under the Common Reporting Standard (CRS).
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The legislation, gazetted as Resolution No. DGT-R-23-2022 (the Resolution), came into force on August 24, 2022. It applies to FIs subject to the automatic exchange of information (AEOI) under CRS, as set out by Costa Rica’s 2013 adherence to the OECD’s multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Under the Resolution, FIs must keep all records relating to their due-diligence around CRS-reportable accounts for a minimum of five years after the end of the reportable period. In the case that the financial account remains open, the five-year period will be extended for as long as the account is subject to reporting.

FIs that fail to comply with the appropriate record-keeping and reporting will be subject to financial penalties at a rate of 2 percent of gross income for the tax year in which the non-compliance occurred, to a maximum of 100 base salaries. The penalty will be decreased by 75 percent if the non-compliant FI provides the records within three days of the tax authority’s deadline.

The amendments are in line with the recommendations set out for Costa Rica in the 2020 peer-review report on AEOI undertaken by the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum). The Resolution notes that the five-year record-keeping period is recommended by the Global Forum’s technical assistance report on implementation of the CRS in February 2022.

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