Costa Rica: Public consultation on draft law introducing reporting obligations for digital platform operators

Costa Rica’s tax authority on 26 April 2024 published a draft resolution, "Resolution on Automatic Exchange of Information Regarding Sellers Who Carry Out Relevant Activities Through Digital Platforms (Spanish)," for public consultation. The aim is to adopt the OECD’s Model Reporting Rules for digital platforms (MRR), which EU member states are required to follow under Council Directive (EU) 2021/514 (DAC7). 

Background

26 countries (and counting) have committed to introducing information reporting obligations on digital platforms by adopting the OECD’s MRR. In addition to the EU countries on the list (where DAC7 applies), other countries include Argentina, Colombia, Iceland (yet to announce adoption measures), and Canada, Costa Rica, New Zealand, and the United Kingdom (that have either adopted or announced measures to adopt the rules). Norway has also announced that it has initiated a project to implement adoption measures and plans to introduce them from 2026. Finally, Australia introduced similar rules under its Sharing Economy Reporting Regime (SERR) (although not based on the MRR).

Costa Rica’s current draft proposal includes the following measures:

Scope

• The proposed scope would be limited to platforms providing accommodation, transport, personal services, and the sale of goods.
• Platform operators can be excluded from the reporting requirement if they meet any of the following criteria: (1) the platform facilitates services or goods sales under €1 million in the previous year, (2) the platform proves that their business model does not allow sellers to generate a profit, or (3) the platform shows that their platform has no reportable sellers, as per the Costa Rican tax administration.
• The reporting requirement would also apply to nonresident platforms facilitating the provision of in-scope activities in Costa Rica and/or the rental of real estate located in Costa Rica. 

Registration

• The tax authority does not have a specific registry for platform operators and therefore would not register or deregister them. When a digital platform operator determines that they are not subject to the reporting requirements, or decides to stop doing so, they must communicate this with a digitally signed request by their legal representative, addressed to the tax authority at Info-DPI@hacienda.go.cr.
• The tax authority would have 10 days to respond to this request. The lack of response would be deemed to constitute an approval of the solicitation. 

Compliance

• Covered platform operators must provide the required information related to the reportable seller no later than January 31 of the following year. The information must be submitted to the tax authority using the Financial Information Exchange System (SIIF) available at https://siif.hacienda.go.cr/siif. However, the information about payments and other amounts (e.g., fees, commissions, or taxes withheld) must be reported quarterly.
• Covered platform operators must implement the OECD MRR’s reportable seller due diligence requirements. 

Transitional measures

• As a transitional measure, platform operators subject to the requirements must implement due diligence rules and procedures from 1 January 2025. The first report on the obligation to provide information on certain activities by platform operators must be submitted no later than 30 April 2026. 

Penalties

• Non-compliance with the reporting requirement would be subject to a fine of 2% of the offender's gross income, with a minimum of three base salaries and a maximum of 100 base salaries.

KPMG observation

Costa Rica’s draft resolution appears to provide that every platform operator must identify if they are not subject to report before the tax authority. Thus, as opposed to requiring covered digital platforms to apply to register, it would create a presumption that all platforms are covered and subject to the reporting requirements. However, if they consider themselves as not subject to the requirements, they may submit a request explaining why they are not subject to this requirement and provide evidence that supports their argument. It is not yet clear how the tax authority will identify covered digital platforms, but early indications are that they intend to do this through the list of registered suppliers and/or intermediaries of cross-border digital services. Nonetheless, considering that this is merely a draft, the tax authority is expected to issue further guidance on the proposed regime in a final resolution.

For more information, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Chinedu Nwachukwu | chinedunwachukwu@kpmg.com

Cristina Sansonetti | csansonetti@kpmg.com