Costa Rica removed from the EU grey list: implications for the business sector
The Council of the European Union announced the removal of Costa Rica from Annex II of the List of Non-Cooperative Jurisdictions for Tax Purposes, commonly known as the “grey list.” Since 2022, the country had been on this list due to concerns regarding its compliance with fiscal transparency and information exchange standards.
The decision was made during the Economic and Financial Affairs Council meeting, the body responsible for evaluating compliance with fiscal standards and international cooperation.
Key reforms that led to Costa Rica’s removal
The country has implemented several measures to strengthen its regulatory framework and ensure adequate cooperation with international organizations. Notable initiatives include:
- The implementation of Law No. 10.381 on passive income from foreign sources, addressing concerns related to international taxation.
- Strengthening the regulatory framework for fiscal transparency and international cooperation, promoting greater openness in information exchange with other jurisdictions.
- Compliance with the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes, ensuring the adoption of best practices in fiscal management.
Benefits for the Costa Rican business sector
Costa Rica’s removal from the EU grey list is a positive development for the business sector, as it brings several strategic benefits:
- Greater access to international financing: By improving the country’s risk perception, Costa Rican businesses may gain access to better credit conditions and financing options in European markets.
- Reduction in operational costs: Financial transactions and operations with Europe will become more efficient and less expensive, avoiding restrictions that previously affected competitiveness.
- Greater tax stability: Alignment with international standards provides businesses with greater legal certainty, facilitating long-term financial and tax planning.
Julio Vargas
julio.vargas@garciabodan.com
Managing Partner
García & Bodán
Costa Rica