In order to avoid double taxation, to have a tool to fight tax evasion and cross-border tax evasion, the agreement between Costa Rica and Mexico, which had been presented last March, came into force.
The idea is to avoid being taxed twice for the same economic transaction that takes place in one of these countries.
The approval of this type of international instruments is very important for Costa Rica because it acts as a commercial incentive among the countries that subscribe to it, because the economic actors see better conditions to carry out transactions when the two countries have agreed to avoid double taxation, said Carlos Vargas, Tax Director.
The agreement also includes an Information Exchange clause, which will allow the tax authorities of Mexico and Costa Rica to share information on transactions that are made between taxpayers in those countries.
This is the third agreement of this type ratified by the country. The first was signed with Spain and is in force since 2011 and the second with Germany, which came into force in 2017. In addition, there is one with the United Arab Emirates, which is still under discussion in the Legislative Assembly.