Costa Rica is on the blacklist of the European Union (EU) as of today, reported the Ministry of Finance.

The blacklist is also known as the EU list of non-cooperative jurisdictions for tax purposes. The list is part of the EU’s work to fight tax evasion and avoidance. 

For the first time since the list was established, Costa Rica is included because it has not fulfilled its commitment to abolish or amend the harmful aspects of its foreign source income exemption regime.

The Council decided also to add the British Virgin Islands, Marshall Islands and Russia to the list. With these additions, the EU list now consists of 16 countries, including American Samoa, Anguilla, Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands and Vanuatu.

Listed countries either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms. "Those reforms should aim to comply with a set of objective tax good governance criteria, which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting," said the EU in its statement.

To try to solve the issue, in March the ministry is presenting a bill to Congress to set the tax on extraterritorial passive income following the recommendations of the International Monetary Fund (IMF), authorities added.

According to the EU, the non-cooperative jurisdictions list, which will be published today, is not to name and shame countries, but to encourage positive change in their tax legislation and practices through cooperation.

"Once a jurisdiction meets all its commitments, its name is removed from the list," they added.

Since it was first established in 2017, the list has been updated regularly and revised as a result of monitoring the measures implemented by jurisdictions to comply with their commitments.

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