- Thursday, January 30, 2020-




By the A.M. Costa Rica staff

Wednesday  deputies of the Legislative Assembly approved in a second and final vote a moratorium on fines for the late declaration of shareholders in corporations.

Many expats hold property like houses and cars in corporations, and they face large fines if they do not file the correct and complicated documents.

According to a deputy, Pablo Heriberto Abarca-Mora, share owners and their representatives have not been able to obtain the required electronic signature device,  due to the delay in appointments to get one at public banks.

"The truth is that there are many people who are trying to obtain the digital signature, which is the first element to do the registration," said Abarca-Mora. "Because of that, we have settled a moratorium of the next two months and in the third month will be charged 50% of the fine. So there is that space of time in which everyone can do the registration."

The moratorium, which awaits the signature of President Carlos Alvarado, states that during February and March no fines will be levied for failure to file the required documents. In the third month, April, only 50% of the fine will be levied, which still could be an estimated between $1,200 to $40,000.

Alvarado is expected to announce that he approved moratorium today or Friday, which was the original deadline for filing to comply with the law.

According to the Ministry of Finance, more than 280,000 companies have the obligation to register their shareholders and others benefiting from the corporation at the Central Bank. This is Law No.9416, titled Transparency and Final Beneficiaries Registry. The idea is to find people who are failing to pay taxes on benefits from corporations. But the law applies to all corporate entities, even those with no economic activity.

In addition to reducing tax evasion, the goal of the law is to allow the exchange of tax information with other countries with which Costa Rica has signed agreements, fight against money laundering and fight against the financing of terrorism, said the ministry.

The information contained in this registry will be used exclusively by the General Directorate of Taxation of the Ministry of Finance and the Financial Intelligence Unit of the Costa Rican Institute on Drugs, said the Central Bank.

The bank authorities say they have developed a high level of technology in terms of security to protect company information.

"There is a guarantee that the computerized system complies with the information security measures accepted internationally, in accordance with the highest standards of confidentiality which is required to obtain the certification required by the law," said Eduardo Prado, Central Bank manager.

The bank has the role of administrator of the registry of shareholders and is the custodian of the information.

The companies or organizations required by law to comply with the registration are, trusts, non-profit organizations, limited liability companies, foreign corporation branches, and third-party resource managers, among others.

Until now, the names of shareholders in most corporations were not public, which is why many corporations were called sociedad anónima.

In December, Garland M. Baker published in A.M. Costa Rica an article Transparency Law 9416 and IRS Form 5471 can be reached here with detailed explanation about this regulation.




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