Costa Rica Forum

Trout
Joined 2020
Posts: 95

3 years ago

Costa Rica and the U.S. signed FATCA

3 years ago

On Monday, the governments of Costa Rica and the United States signed a complimentary agreement to the Foreign Account Tax Compliance Act, FATCA, announced the Ministry of Finance.

According to the ministry, the agreement updates the Intergovernmental Agreement for the effectiveness of the Law on Tax Compliance regarding Foreign Accounts, signed by both parties in 2013.
The agreement enables the General Directorate of Taxation in Costa Rica and the Internal Revenue Service in the United States to share financial information in order to guarantee transparency in the banking transactions that U.S. citizens carry out in Costa Rica.

As of September, the agreement, signed by both the Minister of Finance Elian Villegas and Ambassador of the United States Sharon Day, will enforce the exchange of tax information between both countries.
According to the ministry, with the FATCA Act, the United States established the obligation to banks and financial companies in Costa Rica to provide information related to specific accounts and financial products of the U.S. citizens account holders that would be of interest for tax purposes.

Banks that do not comply with this report will be subject to a withholding tax of 30%, applicable on payments from the U.S. and designed for their clients, said the ministry.
"The signing of the FATCA agreement seeks to maintain the current standard of fiscal transparency established by the Organization for Economic Co-operation and Development, OECD, with respect to the exchange of information for fiscal purposes and mutual assistance," the Ministry said in its statement.

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