variation in the income and sales tax system in Costa Rica, and a ten-year panel of administrative tax records. We construct the Costa Rican tax register from the universe of registration and deregistration records since 2006. We match the register with income and sales tax records from the universe of rms, including both self-employed and corporations. We further match these data with over 20 million third-party and withholding records from rms' transaction partners, nancial institutions and state institutions.

Our analysis is divided into three parts. In the rst part, we leverage the data to conduct a detailled anatomy of compliance.<sup>5</sup> To our knowledge, this is the rst study to use populationwide third-party and withholding data from a developing country, and to analyze all compliance margins, including the extensive, intensive and payment margin. On the extensive margin, we nd that about 50% of tax-liable rms fail to le their income tax declaration. The vast majority of these non-lers are identied through third-party reports, and thus denitely economically active. However, non-lers are disproportionately small. We estimate that total income tax revenue could be increased by at most 10% if all non-lers were made to le. However, a companion paper by Brockmeyer et al. (2015) shows that the gains from a communication intervention to non-lers are actually orders of magnitude smaller. On the intensive margin, we nd that 14-17% of rms underreport their sales, while 30-50% of them under-utilize their costs compared to third-party reports. The potential revenue gains from perfectly enforcing tax liabilities on third-party reported sales are again approximately 10% of income tax revenue. However, evidence from the impact of desk audits shows that realized revenue gains are orders of magnitude smaller. On the payment margin, we nd that 5-25% of small rms pay their taxes with signicant delay. After accounting for theses delays, however, payment is above 95% of liabilities for both the income tax and the sales tax.

We interprete this as evidence that a country like Costa Rica, with relatively high institutional capacity, achieves a satisfactory level of tax compliance on third-party reported margins. Some administrative follow-up interventions on detectable compliance gaps are necessary as deterrence, to maintain the level of compliance, but increasing investments in these administrative interventions is unlikely to yield substantial revenue gains. This does not mean that tax compliance in Costa Rica is near perfect. The Ministry of Finance estimates, based on macro data, that 30% of sales tax liabilities and 70% of corporate income tax liabilities are evaded or avoided (Hacienda 2015). A large part of these liabilities are simply not observable to the government. We thus investigate whether expanding the coverage of third-party information reporting, and of associated withholding mechanisms, holds more promises to increase tax revenues substantially.

We turn to analyze the impact of information reporting in the second part. We begin by showing

> 5We borrow the term from Kleven et al. (2011) who conduct an anatomy of compliance for wage earners and the self-employed in Denmark.

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