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April 9, 2021

Costa Rica’s Tax Administration publishes resolution on Advance Pricing Agreements

The Resolution establishes the procedures for the new Advance Pricing Agreement program. The program allows taxpayers to submit a request with the tax administration to enter into an agreement that establishes the taxpayer’s transfer prices for transactions with related entities.

In Resolution DGT-R-14-2021 (the Resolution), the Costa Rican Tax Administration (DGT for its acronym in Spanish) provides the procedures for a new program for Advance Pricing Agreements (APAs or the Agreement). The Resolution was published in the Official Gazette on 24 March 2021, and is effective as of that date.

An APA is an agreement that is signed between the DGT and a taxpayer and outlines criteria, procedures and hypotheses, in advance, to determine a taxpayer´s transfer prices for a specified period for transactions with related entities.

Office in charge of APA program

The Resolution establishes that the office in charge of the APA program will be called the Sub-Office of Advance Transfer Pricing Agreements of the General Taxation Office (SAPPT for its acronym in Spanish) and will be under the authority of the DGT.

The SAPPT will grant interested taxpayers a preliminary meeting to discuss a potential APA application, without the need to reveal the taxpayer’s name.

APA request

To initiate an APA application, the taxpayer must submit transfer pricing documentation that is prepared in accordance with the regulations under Resolution No. DGT-R-049-2019 of 22 August 2019. The SAPPT may request additional information.

The SAPPT will have six months to respond to the APA request but may extend the time to respond to the request for an additional six months.

The documentation and information submitted as part of the APA request will be treated as confidential and will only be used for the APA procedure.

APA validity

The APA will be valid for five fiscal years, starting either with the fiscal year during which the APA request is presented, or with the subsequent fiscal year. A taxpayer may submit a renewal request to renew the APA for another five fiscal years. The request for renewal must be presented six months before the APA expires.

Annual report and modifications

Taxpayers that have entered into an APA with the DGT must submit an annual report to the SAPPT office, confirming their compliance with the APA’s terms and that the underlying assumptions for granting the APA are still valid. This report must be submitted three months after the tax period closes.

Both the SAPPT and the taxpayer may request modifications to the Agreement if the assumptions or the taxpayer’s circumstances have varied significantly since the APA was signed.

Tax administration provisions

The DGT may deny, revoke or cancel an APA or deny an APA renewal or modification request. It must notify the taxpayer of the denial, revocation or cancellation and indicate that the taxpayer has no recourse.

Once an APA is signed, all the information and documentation provided are subject to the spontaneous exchange of information, in accordance with Article 7 of the Convention on Mutual Assistance in Tax Matters (Law No. 9118 of 7 February 2013) and Article 115 bis of the Code of Tax Regulations and Procedures (Law No. 4755 of 3 May 1971).


APAs are a potentially valuable tool for providing legal certainty on transfer pricing matters. Costa Rican taxpayers with a significant volume of transactions with related parties may want to evaluate the possibility of submitting an APA request to the SAPPT.


For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., San José, Costa Rica

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young Abogados, Latin America Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


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