Tax News Update    Email this document    Print this document  

May 2, 2023
2023-0796

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

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement