May 2, 2023
Costa Rican Tax Authority modifies resolution on requests for and issuance of tax residence certificates
- The Costa Rican Tax Authority has proposed modifications to clarify (i) how to compute the permanence period in the country for taxes with a monthly fiscal period (i.e., tax on capital income and capital gains), and (ii) that tax residency certificates may not be used to claim the benefits of a double taxation agreement, if the corresponding tax has not been paid.
- The modifications became effective on 21 April 2023.
On 21 April 2023, the Costa Rican Tax Authority published in the Official Gazette resolution No. MH-DGT-RES-0003–2023, which modifies resolution No. DGT-R-065-2018, regarding determining tax residence and issuing certificates of tax residence.
In part, the modifications:
- Clarify how to compute the permanence period required to qualify for tax residence for purposes of monthly income tax certificates (i.e., tax on capital income and capital gains)
- Clarify how to submit an application for a tax residence certificate through the Tax Authority platform (in Spanish "Plataforma de Trámites Virtuales," TRAVI)
- Detail the information that must be filed with an application for a tax residence certificate, including documentation demonstrating the taxpayer's economic activity in the country and documentation that supports the information contained in the application
- Clarify that if a taxpayer requests a tax residence certificate to comply with foreign legislation or requirements of foreign tax authorities, the taxpayer must provide a certified copy of the document demonstrating that requirement, along with an official translation if the information is in a language other than Spanish
- Clarify that if a taxpayer requests a tax residence certificate to apply the benefits included in a convention for the elimination of double taxation, the applicant must have paid the corresponding tax; if the tax has not been paid, the Tax Authority must indicate that the certificate being is issued to verify tax residence, but may not indicate that it is being issued to apply the benefits of a convention for the elimination of double taxation
The modifications entered into force after their publication in the Official Gazette.
For additional information with respect to this Alert, please contact the following:
Ernst & Young, S.A., San José, Costa Rica
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor