Lawmakers asked to draw clear line between tax avoidance and evasion

Frequently the country’s finance and tax officials seem to confuse tax avoidance with tax evasion. The first is legal, and the second is a crime.

A representative of the  Colegio de Abogados, Juan Luis León, has appeared before lawmakers saying that the country requires a clear definition between the two concept.

The legislature has impaneled a special commission to study and discuss the revelations of the Panamá Papers, the documents stolen electronically from a Panamá law firm.

León said that the creation of a sociedad anónima  or similar is not incorrect but it is the use to which such an entity may be put that could be illegal.

Some lawmakers seemed to agree.

The Panamá firm of Mossack Fonseca & Co. specialized in creating offshore corporations for clients.

The stolen data related to more than 200,000 such firms which are located in countries where, for the most part,  taxes are low and there is less red tape.

Costa Rica does not tax its citizens on foreign earnings, so residents here have an advantage to operate international businesses elsewhere. Finance officials have come close to calling this tax evasion, which it is not.

However, lawmakers are in the process of closing what they consider to be tax loophole. The legislature just voted to submit a tax fraud measure to what is called a rapid process. The procedure limits the amendments and discussions on the measure.

Lawmakers have not passed the anti-fraud bill itself, although government officials are hopeful. Among other requirements in the proposed law is that companies that do business with the public have to accept credit or debit cards as payment, and a firm must have been registered with the tax agency, the  Dirección General de Tributación, to obtain a business license or other various local permits.

The government also is pushing strongly to require corporations to disclose the names of their shareholders.

The main concern of expat retirees is that the government will impose some form of tax on money that comes into the county, such as pensions or rents. That is not in the anti-fraud bill.

Frequently the country’s finance and tax officials seem to confuse tax avoidance with tax evasion. The first is legal, and the second is a crime.

A representative of the  Colegio de Abogados, Juan Luis León, has appeared before lawmakers saying that the country requires a clear definition between the two concept.

The legislature has impaneled a special commission to study and discuss the revelations of the Panamá Papers, the documents stolen electronically from a Panamá law firm.

León said that the creation of a sociedad anónima  or similar is not incorrect but it is the use to which such an entity may be put that could be illegal.

Some lawmakers seemed to agree.

The Panamá firm of Mossack Fonseca & Co. specialized in creating offshore corporations for clients.

The stolen data related to more than 200,000 such firms which are located in countries where, for the most part,  taxes are low and there is less red tape.

Costa Rica does not tax its citizens on foreign earnings, so residents here have an advantage to operate international businesses elsewhere. Finance officials have come close to calling this tax evasion, which it is not.

However, lawmakers are in the process of closing what they consider to be tax loophole. The legislature just voted to submit a tax fraud measure to what is called a rapid process. The procedure limits the amendments and discussions on the measure.

Lawmakers have not passed the anti-fraud bill itself, although government officials are hopeful. Among other requirements in the proposed law is that companies that do business with the public have to accept credit or debit cards as payment, and a firm must have been registered with the tax agency, the  Dirección General de Tributación, to obtain a business license or other various local permits.

The government also is pushing strongly to require corporations to disclose the names of their shareholders.

The main concern of expat retirees is that the government will impose some form of tax on money that comes into the county, such as pensions or rents. That is not in the anti-fraud bill.

Proposed law puts burden of blocking inmate calls on providers
By the A.M. Costa Rica staff


The nation’s prisons are full of crooks who have nothing better to do all day than try to scam citizens on the outside.  The techniques are many and usually involve responding to classified ads and using the assistance of an accomplice.

All this is possible because the prisoners have illicit cell telephones. Regular fixed-line calls are monitored, and those who receive a call from prison receive a taped alert saying from where the call originates.

The Ministerio de Justicia y Paz, which runs the prisons, has

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