COSTA RICA
DOUBLE TAXATION TREATIES
Costa Rica is not a party to any double taxation treaties. However it has signed an exchange of information treaty with the United States with a view to promoting the necessary interchange of tax information and to ensure that the correct level of taxation is levied in both countries as well as to eradicate tax evasion.
OTHER INTERNATIONAL AGREEMENTS
MUTUAL ASSISTANCE TREATIES
Other than the exchange of information treaty signed with the United States Costa Rica has no mutual assistance treaties with any other countries. The banks do not share any banking information with the tax department or with any other Government departments other than the central bank. Civil and criminal implications attach to the disclosure of any information received by a lawyer and disclosed without proper authority.
FREE TRADE AGREEMENTS
President Bush signed the Central American Free Trade Agreement (CAFTA) in August, 2005, after its approval by Congress. The main aim of the agreement is the lifting of tariffs and trade restrictions between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. According to recent statistics, the CAFTA area has a combined economy of $57 billion, and approximately $20 billion worth of trade takes place between the CAFTA nations and the US.
CAFTA was signed by Costa Rica, along with four other Central American nations, in June, 2004. However, debate lingers in Costa Rica as to the merits of CAFTA, and the Legislative Assembly has yet to ratify the free trade agreement. President Pacheco has further complicated the issue by insisting that CAFTA can only be approved once the fiscal reform bill has been passed into law.
CAFTA, will eliminate tariffs and duties on around 80% of manufactured goods and 50% of agricultural products exported from the United States to Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Tariffs on all other goods, with the exception of American sugar and a few Central American agricultural goods, will be phased out over a longer period.
Applauding the pact, the US National Association of Manufacturers said: “This is the highest-quality trade agreement yet.”
“Not only does it eliminate tariffs on 80 percent of US manufactured exports immediately, but it also sets new standards for intellectual property protection, anti-corruption measures, open distribution channels, and other issues that are important for US companies,” observed NAM Vice President for International Economic Affairs, Frank Vargo.
Meanwhile, Costa Rica’s Foreign Trade Minister Alberto Trejos commented that the sealing of the CAFTA deal was “a moment of great satisfaction” for the country. “It was a hard negotiation, during which the country obtained the balance and objectives it had proposed at the beginning of the process,” noted Trejos.
BILATERAL INVESTMENT TREATIES
Costa Rica has bilateral investment treaties already in effect with Canada, Chile, Great Britain, France, Spain, Germany, Switzerland and Taiwan, Korea, Venezuela, Paraguay, Argentina, the Czech Republic and the Netherlands. Additionally, there are bilateral investment treaties signed but not yet ratified with Bolivia, Ecuador, Belgium-Luxembourg and Finland.
The bilateral investment treaty with Poland is pending signature and the bilateral investment treaties with the following countries are under negotiation: Austria, Barbados, Brazil, Denmark, United States of America, Greece, Ireland, Jamaica, Italy, Norway, Peru, Portugal, Romania, Sweden and Uruguay.
