Lawmakers pass two major bills related to taxes

Lawmakers passed for the second and final time Monday a proposed law to tighten up tax collection and to attack fraud.

The 67-page document contains many changes, and some only will become apparent when the law goes into effect.

The text was submitted to lawmakers March 31, 2011, as part of an extensive tax package proposed by the Laura Chinchilla Miranda administration. Much of the package never was passed. But No. 18.041 survived.

Among other goals, the law seeks to tighten up the partial collection of income taxes throughout the year to provide better cash flow for the state. Now taxpayers are required to report and pay taxes every three months. Many do not. The new law would impose interest charges.

The measure also tightens up enforcement of the law and also administrative procedures outside the criminal code. The summary of the law noted that few tax cases ever result in criminal penalties, so the proposal applies greater precision to tax crimes.

The law also expands the definition of transfer as is related to real estate. Either a direct or indirect transfer must be reported to the local municipality within 15 days and the appropriate tax paid. The draft of the law says that a transfer includes any change in the power over a piece of real estate.

Clearly the purpose is to generate tax even when owners transfer their rights by selling the shares of a
corporation. Corporate ownership is common in Costa Rica. Real estate can be transferred quickly by a simple endorsement on shares of stock of the corporation that owns the property.

Under the proposed law that was passed Monday the buyer assumes the obligation of reporting the sale. The text contains certain exemptions, such as assuming ownership through marriage.

The law also addresses in detail a requirement to provide a list of shareholders to the Registro Nacional.

The draft also includes measure to combat contraband and strengthen collection by the nation’s customs service. The Ministerio de Hacienda, which presented the law, said that one purpose for the changes was to promote voluntary cooperation with the law and to prevent tax evasion. The draft also said that the law would simplify tax transactions and stimulate taxpayers to correct deficiencies.

Also Monday lawmakers passed a bill for the second and final time to inject transparency in financial transactions and to open bank secrecy upon the order of a judge to speed investigation into tax matters.

The measure seeks to remove Costa Rica from the blacklist of the Organization for cooperation and Economic Development that has been critical of the secrecy imposed by the law here on bank accounts.

The measure also promoted interchange of tax information with other countries.

Both measures require the president’s signature to become law. Casa Presidencial supported both.

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