After a session that lasted more than nine hours, the law to improve the fight against tax fraud was passed in first reading by the Legislature.
The initiative received 42 votes in favor from Partido de Liberación Nacional (PLN), Unidad Social Cristiana (PUSC), Partido Acción Ciudadana (PAC), Frente Amplio and Christian parties. However, it had 3 votes against from Movimiento Libertario and one from Frente Amplio (Ligia Fallas).
The bill was passed after a long session in which legislator Otto Guevara spoke 9 hours and 30 minutes to justify 37 motions presented to the text, while other lawmakers were upset and some even fell asleep.
The main change in the fight against tax fraud is the creation of a centralized shareholders and beneficial owners record that will be in the Central Bank of Costa Rica. That means that companies’ representatives will have to provide information regarding beneficiaries and legal structures that have an important participation.
In addition, the Ministry of Finance and The Costa Rican Drug Institute (ICD) will have access to this database to investigate suspected tax fraud in companies and for investigations related to drug trafficking and money laundering.
The law eliminates the legal authority of the Treasury to perform administrative distraint on companies suspected of tax evasion. The institution will have to wait for a judge’s order, who will have 10 days to decide.