Tax agency moving to get names of shareholders

The tax authorities are seeking to obtain the names of shareholders of corporations,

The Dirección General de Tributación has prepared but appears to have not issued a decree that would require everyone who is responsible for a corporation to report the names, identification numbers, citizenship and other data of every shareholder several times a year.

This is an outgrowth of a law that assess a tax on the transfer of real estate. However, it is unlikely that the tax agency is going to so much trouble simply to collect small amounts of money.

Until now the only listing of shareholders has been on the private books of the corporation. Sometimes they would be disclosed. For example, for a firm to do business with the government, the names of major shareholders must be disclosed to avoid officials bidding on major contracts.

In addition, when a firm seeks to become listed as a small or medium enterprise, a designation that has some economic benefits, the names of shareholders must be disclosed.

Media companies in Costa Rica also must disclose the names of shareholders each year.

The decree by the tax agency is not without opposition.  Francisco Villalobos, the former head of the tax agency, wrote in a February opinion piece in a Spanish-language newspaper that such a change probably should be a job for the legislature and not just  a simple declaration by Tributación. He also noted that there is no guarantee that the names would not be leaked.

Generally real estate held in a corporation changes hands by the transfer of stock shares

There is no public procedure, and there is no money collected by the government.

Significantly it is Tributación that is seeking the list of stockholders and not the Registro Nacional, which supervises the real estate records.

Why Tributación has not issued the decree or declaration also is strange. The document talks about a link to provide lists of shareholders electronically on the agency’s Web page, but no such link is visible. The first declaration of shareholders was supposed to be by Feb. 29

A.M. Costa Rica has reported for some time that the government was trying to eliminate anonymous corporations. Right now the only public  names are that of the corporate offices who do not have to be shareholders.

The Tributación declaration also suggest that tax collectors want to keep track of income of individuals, such as payments form their corporations. That information is not easily available to tax collectors now.

The first step in assessing a broader sales tax on real estate transfers would be to know the name of individual shareholders so that if a transfer takes place, the transaction is on the record.

Many proposals for changes in the tax rules have been frozen at Tributación in anticipation of a change in government.  A number of decrees and proposed laws to be sent to the legislature are awaiting approval by the next round of political appointees.

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