The Law to Improve the Fight against Tax Fraud (Law No. 9416, effective as of December 20, 2016), created the obligation for legal entities and other corporate structures domiciled in Costa Rica to provide the Central Bank of Costa Rica (BCCR), on an annual basis, the list of the stock capital holders and final beneficiaries holding a substantial stock capital interest (ranging from 15% to 25%), as well as to report any changes in stock ownership exceeding these percentages.

This law left certain aspects to be regulated at a later time through general resolutions or regulations such as the determination of what is considered substantial stock capital interest (within the range indicated above); the manner in which stock capital holders´ information should be provided to the BCCR, as well as the relevant information that must be disclosed for tax purposes and for the Drug Control Institute.

In order to fill the legal vacuums, he “Regulations on the Registry of Transparency and Final Beneficiaries”, was published on April 23rd (Executive Decree No. 41040-H) and contemplates, among others, the issues listed below:

• Entities obligated to disclose information
• Entities excluded from this obligation
• Officers in charge of submitting the information (natural person authorized by law to act on behalf of legal entities: companies, trusts, non-profit organizations, among others.
• The implications of the sworn statements of the legal representatives responsible for rendering the report.
• Substantial stock ownership of Costa Rican legal entities by foreign entities or any foreign legal structures.
• Obligations and faculties of the BCCR.
• Specific regulations regarding trusts.
• Specific regulations for non-profit organizations.
• List of defaulting entities.
• Requests for the rectification of information.
• Disciplinary policies.
• Duty of confidentiality imposed on Registry officials with access to information.

Although the Regulation is now currently in force, the BCCR does not yet have the technological functionality required for the proper receipt and management of such sensitive information disclosed by the organizations. It will be the BCCR and the Drug Control Institute who will define the format to be used to provide the information.

Likewise, as far as the information provision relevant to the Tax Administration and the Drug Control Institute (Articles 5, 6 and 7 of the Law), a "joint resolution" is still pending that will regulate and establish the requirements and procedure by means of which the information required in the Law must be presented, as well as the date by which the information must be disclosed.

For further assistance on this or any other matter of your concern, please feel free to contact us.