EU adds Costa Rica to list of tax havens

According to the decision approved by the Ministers of Economy and Finance, the list of tax havens updated by the European Union includes sixteen territories:

• the four added Russia, Costa Rica, the British Virgin Islands, and the Marshall Islands;
• Panama, American Samoa, Fiji, Guam, Palau, Trinidad and Tobago, Samoa, the US Virgin Islands, Vanuatu, the Bahamas, Anguilla, and the Turks and Caicos Islands, which were already on the list.

The list, updated every six months, includes countries that do not comply with EU standards on tax transparency, tax fairness, or the implementation of international rules to prevent the erosion of tax bases or profit shifting and do not take steps to address these issues.

COSTA RICA’S RESPONSE

The Costa Rican presidential website said in a press release the previous day that the measure was “due to the failure to comply with the commitment made by the previous government to reform the tax system to tax passive offshore income by December 31, 2022.

According to European Union directives, passive income earned by a person or company abroad should be taxed in Costa Rica to avoid “unfair competition” between countries’ tax systems and to ensure that there is tax-free income,” the Costa Rican government added.

“Although it cannot be ensured that the sanctions of all EU member states will be avoided, the government (of Rodrigo) Chaves Robles is coordinating actions to ensure that the impact on investment is minimized,” the communiqué concluded.According to the decision approved by the Ministers of Economy and Finance, the list of tax havens updated by the European Union includes sixteen territories: