Netherlands - Costa Rica Tax Treaty

AGREEMENT

BETWEEN

THE KINGDOM OF THE NETHERLANDS

AND

THE REPUBLIC OF COSTA RICA

FOR

THE EXCHANGE OF INFORMATION ON TAX MATTERS

The Government of the Kingdom of the Netherlands and the Government of the Republic of Costa Rica,

DESIRING to facilitate the exchange of information on tax matters;

Have agreed as follows:

Article 1 Object and scope of the Agreement

The competent authorities of the Contracting Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safeguards secured to persons by the laws or administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.

Article 2 Jurisdiction

A requested Party is not obligated to provide information which is neither held by its authorities nor in the possession or control of persons who are within its territorial jurisdiction.

Article 3 Taxes Covered

The taxes which are the subject of this agreement are:

a) in the Netherlands: taxes of every type and description, including customs duties; b) in the Republic of Costa Rica: taxes of every type and description, including customs duties, collected by the Ministry of Finance.

This Agreement shall also apply to any identical or substantially similar taxes

imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes.

The competent authorities of the Contracting Parties shall notify each other of any substantial changes to the taxation and related information gathering measures covered by this Agreement.

The competent authorities of the Contracting Parties shall notify each other of

any relevant changes in the organization, laws or legal precedents to the taxation and related information gathering measures covered by this Agreement, provided that these changes are significant to the exchange of information.

Article 4 Definitions

For the purposes of this Agreement, unless otherwise defined:

the term “Contracting Party” means Costa Rica or the Netherlands as the context requires;

the term “Costa Rica” means: the land, maritime, and air space under its sovereignty and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law;

the term “the Netherlands” means the part of the Kingdom of the Netherlands that is situated in Europe, including its territorial seas, and any area beyond the territorial sea within which the Netherlands, in accordance with international law, exercises jurisdiction or sovereign rights with respect to the sea bed, its subsoil and its superjacent waters, and their natural resources;

the term “competent authority” means:

in the case of Costa Rica, the Director of the Tax Administration or his authorised representative;

ii)

in the case of the Netherlands, the Minister of Finance or his authorised representative;

the term “person” includes an individual, a company and any other body of persons;

the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes;

the term “publicly traded company” means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold “by the public” if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of investors;

the term “principal class of shares” means the class or classes of shares representing a majority of the voting power and value of the company;

the term “recognised stock exchange” means any stock exchange agreed upon by the competent authorities of the Contracting Parties;

the term “collective investment fund or scheme” means any pooled investment vehicle, irrespective of legal form. The term “public collective investment fund or scheme” means any collective investment fund or scheme provided the units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed by the public. Units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed “by the public” if the purchase, sale or redemption is not implicitly or explicitly restricted to a limited group of investors;

the term “tax” means any tax to which this Agreement applies;

the term “applicant Party” means the Contracting Party requesting information;

the term “requested Party” means the Contracting Party requested to provide information;

the term “information gathering measures” means laws and administrative or judicial procedures that enable a Contracting Party to obtain and provide the requested information;

the term “information” means any fact, statement or record in any form whatever;

the term “criminal tax matters” means tax matters involving intentional conduct which is liable to prosecution under the criminal laws of the applicant Party;

the term “criminal laws” means all criminal laws designated as such under domestic law irrespective of whether contained in the tax laws, the criminal code or other statutes.

As regards the application of this Agreement at any time by a Contracting Party,

any term not defined therein shall, unless the context otherwise requires, or the competent authorities decide to give a common meaning to a term in the Agreement in accordance with the provisions of Article 11, have the meaning that it has at that time under the law of that Party, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.

The Commentary of the OECD Model Agreement on Exchange of information on

Tax Matters shall apply to the interpretation of this Agreement.

Article 5 Exchange of information upon request

The competent authority of the requested Party shall provide upon request

information for the purposes referred to in Article 1. Such information shall be exchanged without regard to whether the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct occurred in the requested Party.

If the information in the possession of the competent authority of the requested

Party is not sufficient to enable it to comply with the request for information, that Party shall use all relevant information gathering measures to provide the applicant Party with the information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.

If specifically requested by the competent authority of an applicant Party, the

competent authority of the requested Party shall provide information under this Article, to the extent allowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original records.

Each Contracting Party shall ensure that its competent authorities for the

purposes specified in Article 1 of this Agreement, have the authority to obtain and provide upon request:

information held by banks, other financial institutions, and any person acting in an agency or fiduciary capacity including nominees and trustees;

information regarding the ownership of companies, partnerships, trusts, foundations, “Anstalten” and other persons, including, within the constraints of Article 2, ownership information on all such persons in an ownership chain; in the case of trusts, information on settlors, trustees and beneficiaries; and in the case of foundations, information on founders, members of the foundation council and beneficiaries. Further, this Agreement does not create an obligation on the Contracting Parties to obtain or provide ownership information with respect to publicly traded companies or

public collective investment funds or schemes unless such information can be obtained without giving rise to disproportionate difficulties.

The competent authority of the applicant Party shall provide the following

information to the competent authority of the requested Party when making a request for information under this Agreement to demonstrate the foreseeable relevance of the information to the request:

the identity of the person under examination or investigation;

a description of the information sought including its nature and the form in which the applicant Party wishes to receive the information from the requested Party;

the tax purpose for which the information is sought;

grounds for believing that the information requested is held in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party;

to the extent known, the name and address of any person believed to be in possession of the requested information;

a statement that the request is in conformity with the law and administrative practices of the applicant Party, that if the requested information was within the jurisdiction of the applicant Party then the competent authority of the applicant Party would be able to obtain the information under the laws of the applicant Party or in the normal course of administrative practice and that it is in conformity with this Agreement;

a statement that the applicant Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

The competent authority of the requested Party shall forward the requested information as promptly as possible to the applicant Party. To ensure a prompt response, the competent authority of the requested Party shall confirm the receipt of a request in writing to the competent authority of the applicant Party and shall notify the competent authority of the applicant Party of deficiencies in the request, if any, within 60 days of the receipt of the request.

If the competent authority of the requested Party has been unable to obtain

and provide the information within 90 days of receipt of the request, including if it encounters obstacles in furnishing the information or it refuses to furnish the information, it shall immediately inform the applicant Party, explaining the reason for its inability, the nature of the obstacles or the reasons for its refusal.

Article 6 Tax examinations abroad

A Contracting Party may, to the extent permitted under its domestic laws,

following reasonable notice from the Requesting Party, allow representatives of the competent authority of the other Contracting Party to enter the territory of the firstmentioned Contracting Party to interview individuals and examine records with the written consent of the persons concerned. The competent authority of the second-mentioned Contracting Party shall notify the competent authority of the first-mentioned Contracting Party of the time and place of the meeting with the individuals concerned.

At the request of the competent authority of one Contracting Party, the

competent authority of the other Contracting Party may, to the extent permitted under its domestic laws, following reasonable notice from the Requesting Party,

allow

representatives of the competent authority of the first-mentioned Contracting Party to be present at the appropriate part of a tax examination in the second-mentioned Contracting Party.

If the request referred to in paragraph 2 is acceded to, the competent authority

of the Contracting Party conducting the examination shall, as soon as possible, notify the competent authority of the other Contracting Party about the time and place of the examination, the authority or official designated to carry out the examination and the procedures and conditions required by the first-mentioned Contracting Party for the conduct of the examination. All decisions with respect to the conduct of the tax examination shall be made by the Contracting Party conducting the examination.

Article 7 Possibility of declining a request

The requested Party shall not be required to obtain or provide information that

the applicant Party would not be able to obtain under its own laws for purposes of the administration or enforcement of its own tax laws. The competent authority of the requested Party may decline to assist where the request is not made in conformity with this Agreement.

The provisions of this Agreement shall not impose on a Contracting Party the

obligation to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process. Notwithstanding the foregoing, information of the type referred to in Article 5, paragraph 4 shall not be treated as such a secret or trade process solely because it is in possession of such persons mentioned in that paragraph.

obligation

The provisions of this Agreement shall not impose on a Contracting Party the to

obtain

provide

information,

which

would

reveal

confidential

communications between a client and an attorney, solicitor or other admitted legal representative where such communications are:

produced for the purposes of seeking or providing legal advice; or

produced for the purposes of use in existing or contemplated legal proceedings.

The requested Party may decline a request for information if the disclosure of

the information would be contrary to public policy (ordre public).

A request for information shall not be refused on the ground that the tax claim

giving rise to the request is disputed.

The requested Party may decline a request for information if the information is

requested by the applicant Party to administer or enforce a provision of the tax law of the applicant Party, or any requirement connected therewith, which discriminates against a national of the requested Party as compared with a national of the applicant Party in the same circumstances.

Article 8 Confidentiality

Any information received by a Contracting Party under this Agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts and administrative bodies) in the jurisdiction of the Contracting Party concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement, or the oversight above. Such persons or authorities shall use such information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. The information may not be disclosed to any other person or entity or authority or any other jurisdiction without the express written consent of the competent authority of the requested Party, as far as such consent is permitted under the domestic laws of the requested Party.

Article 9 Costs

Incidence of costs incurred in providing assistance shall be agreed by the competent authorities.

Article 10 Implementation legislation

The Contracting Parties shall enact any legislation necessary to comply with, and give effect to, the terms of this Agreement.

Article 11 Mutual agreement procedure

Where difficulties or doubts arise between the Contracting Parties regarding

the implementation or interpretation of this Agreement, the competent authorities shall endeavour to resolve the matter by mutual agreement.

In addition to the agreements referred to in paragraph 1, the competent

authorities of the Contracting Parties may mutually agree on the procedures to be used under the Articles 5 and 6.

The competent authorities of the Contracting Parties may communicate with

each other directly for purposes of reaching agreement under this Article.

The Contracting Parties may also agree on other forms of dispute resolution.

Article 12 Entry into force

This Agreement shall enter into force on the first day of the second month after receipt of the last notification in which each Party has notified the other in writing of the completion of its necessary internal procedures for entry into force.

Upon entry into force, it shall have effect:

for criminal tax matters on that date; and

for all other matters covered in Article 1 on that date, but only in respect of taxable periods beginning on or after that date, or where there is no taxable period, all charges to tax arising on or after that date.

Article 13 Termination

Either Contracting Party may terminate this Agreement by serving a notice of

termination either through diplomatic channels or by letter to the competent authority of the other Contracting Party.

Such termination shall become effective on the first day of the month following

the expiration of a period of six months after the date of receipt of notice of termination by the other Contracting Party.

Following termination of this Agreement the Contracting Parties shall remain

bound by the provisions of Article 8 with respect to any information obtained under the Agreement.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed this Agreement.

DONE at …………..this ……….…..... day of , in duplicate, in the English, Spanish and Netherlands languages, all texts being equally authentic. In case of divergence between any of the texts, it shall be resolved in accordance with the English text.

For the Kingdom of the Netherlands:

For the Republic of Costa Rica:

PROTOCOL

BETWEEN

THE KINGDOM OF THE NETHERLANDS

AND

THE REPUBLIC OF COSTA RICA

CONCERNING

THE INTERPRETATION AND IMPLEMENTATION OF THE AGREEMENT BETWEEN THE KINGDOM OF THE NETHERLANDS AND THE REPUBLIC OF COSTA RICA FOR THE EXCHANGE OF INFORMATION ON TAX MATTERS

The Government of the Kingdom of the Netherlands

and

the Government of the Republic of Costa Rica, (hereinafter referred to as “the Contracting Parties”),

Desiring to facilitate the exchange of information on tax matters,

Have further agreed as follows:

Article 1 (Article 5 - Data protection)

If personal data are exchanged under the Agreement between the Kingdom

of the Netherlands and the Republic of Costa Rica for the exchange of information on tax matters (hereinafter referred to as “the Agreement”), the following additional provisions shall apply: a)

the receiving authority may use such data only for the stated purpose and shall be subject to the conditions prescribed by the supplying authority; such use is also permitted, subject to the written consent required under Article 8, for the prevention and prosecution of serious crimes and for the purpose of addressing serious threats to public security;

the receiving authority shall on request inform the supplying authority about the use of the supplied data;

personal data may be supplied only to the responsible agencies. Any subsequent supply of the information to other agencies may be effected only with the prior written approval of the supplying authority;

the supplying authority shall be obliged to take all reasonable care to ensure that the data to be supplied are accurate and that they are necessary for and proportionate to the purpose for which they are supplied. Any ban on data supply prescribed under applicable domestic law shall be observed. If it emerges that inaccurate data or data which should not have been supplied have been supplied, the receiving authority shall be informed of this without delay. That authority shall be obliged to correct or erase such data without delay;

upon application, the person concerned shall be informed of the supplied data relating to him of the use to which such data are to be put. There shall be no obligation to furnish this information if on balance it turns out that the public interest in withholding it outweighs the interest of the person concerned in receiving it. In all

other respects, the right of the person concerned to be informed of the existing data relating to him shall be governed by the domestic law of the Contracting Party in whose sovereign territory the application of the information is made; f)

the receiving authority shall bear liability in accordance with its domestic laws in relation to any person suffering unlawful damage as a result of the supply of data pursuant to this Protocol. In relation to the person suffering unlawful damage, the receiving authority may not plead in its defence that the damage had been caused by the supplying authority;

if the domestic law of the supplying authority provides, with respect to the personal data supplied, for erasure within a certain period of time that authority shall inform the receiving authority accordingly. Irrespective of such periods, supplied personal data shall be erased once they are no longer required for the purpose for which they were supplied;

the supplying and the receiving authorities shall be obliged to keep official records of the supply and receipt of personal data;

the supplying and the receiving authorities shall be obliged to take effective measures to protect the personal data supplied against unauthorized access, unauthorized alteration and unauthorized disclosure.

Article 2 (Article 5 – Notification on request)

For the purpose of facilitating the exchange of information under the Agreement, where information received by the competent authority of the Requesting Party is not sufficient to enable it to comply with the request, it shall advise the competent authority of the Requesting Party of that fact and request such additional information as may be required to enable the effective processing of the request.

Article 3 (Modifications to the Agreement)

At any time after the entry into force of this Protocol, a Contracting Party may propose modifications, for the purpose of bringing the Agreement into conformity with the internationally agreed standards on exchange of information for tax purposes. Upon receipt of such a proposal, the other Contracting Party shall enter into good faith negotiations concerning the proposal.

Article 4 (Variation of Protocol)

In light of the experience of operating the Agreement, or to reflect changing circumstances either Contracting Party may wish to propose a variation in the terms of this Protocol. If so, it is understood that the other Contracting Party will agree to hold timely discussions with a view to revising the terms of the Agreement: a)

The competent authority may initiate discussions should: (i)

the Kingdom of the Netherlands enter into an agreement with another jurisdiction which provides for other forms of exchange of information;

(ii)

the Republic of Costa Rica enters into an agreement with another jurisdiction which provides for other forms of exchange of information;

(iii)

either Contracting Party introduces new legislation which enables other forms of exchange of information.

If the Kingdom of the Netherlands enters into arrangements with other jurisdictions for the provision of information on tax matters that are less burdensome in any material respect than the provisions of the Agreement, the Republic of Costa Rica may initiate discussions with the Kingdom of the Netherlands with a view to modifying the Agreement to have similar arrangements.

Article 5

This Protocol shall form an integral part of the Agreement between the Kingdom of the Netherlands and the Republic of Costa Rica for the exchange of information on tax matters, and shall enter into force on the same date as the Agreement.

Article 6

The Contracting Parties may, by mutual arrangement, amend this Protocol at any time in writing. Such amendment shall enter into force on the first day of the second month after the Contracting Parties have notified each other in writing through diplomatic channels that the constitutional or internal requirements for the entry into force of the amendment have been complied with.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by their respective Governments, have signed this Protocol.

For the Kingdom of the Netherlands:

For the Republic of Costa Rica

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