Costa Rica’s banking sector won a lawsuit against the Ministerio de Hacienda (Ministry of Finance), arising from disagreements over the method used to calculate tax payments.

The legal dispute dates back several years, since in 2003 the General Directorate of Taxation (DGT) validated the methodology suggested by the Costa Rican Banking Association (ABC) to calculate the payment of taxes on the income of financial intermediaries. However, in 2005 the authorities reversed the decision.

Crhoy.com reports that the decision of the Contentious-Administrative Tribunal, dated May 6, 2019, determined that “… when the Treasury reversed its decision and misapplied the act retroactively for all fiscal periods, it violated the principles of legitimate confidence, bonafide and juridical security, as well as the due process of the Right of Defense.”

María Isabel Cortés, executive director of ABC, told Crhoy.com that “… The ruling recognizes that the Tax Administration issued a criterion that established how financial institutions should proceed, and that this criterion could not be unknown.”

Cortés added that it is important that there are clear rules for the application of the law, because it is “a basic principle in the relationship with public authorities that must follow the procedures established by law to change the criteria based on which economic agents make their decisions.”

Among the most important effects of the judgment, which is still subject to an eventual appeal before Chamber I, is the refund of the amounts paid in excess of the income tax by the banks audited by the DGT.

Source: Crhoy.com


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