|Standard VAT Rate||Digital Reporting Requirements / E-invoicing||VAT on Cross-Border Electronically Supplied Services||Tax Authority Website|
|13%||Yes||Yes||Ministry of Finance (Ministerio de Hacienda)|
VAT Rates in Costa Rica
The standard Value Added Tax (Impuesto al Valor Agregado - IVA) rate in Costa Rica is 13%, with some services exempt from Costa Rica VAT, such as education services, residential electricity and water supply, and terrestrial transportation services.
|VAT Rates||Rate Type||Description|
|13%||Standard Rate||Applies to all taxable supplies, with certain exceptions|
|4%||Reduced Rate||Applies to airline tickets and private health services|
|2%||Reduced Rate||Applies to medicines and private health services|
|1%||Reduced Rate||Applies to agricultural goods and basic food|
|0.5%||Reduced Rate||Applies to agricultural equipment, machinery, and supplies|
|0%||Zero Rate||Applies to education services, residential supply of electricity and water, and terrestrial transportation services|
VAT Registration Thresholds in Costa Rica
There is no registration threshold in Costa Rica. You must register if you habitually or incidentally sell movable property, provide services or import goods.
Taxpayers can register under the simplified regime, “Régimen de Tributación Simplificada” (RST), depending on their taxable activities and turnover. This regime covers VAT and income tax.
Businesses not domiciled or incorporated in Costa Rica should register in the country if:
- They have a physical presence (i.e. permanent establishment) in the country.
- They provide digital services in that country, in which case they should opt between being fully VAT-registered or being subject to withholding VAT from credit cards and financial institutions.
Costa Rican VAT Number Format
Individuals and companies that are required to register should register with the “Registro Único Tributario” (RUT), which identifies and classifies taxpayers. However, there is no specific Tax Identification Number in Costa Rica. Taxpayers are identified differently depending on their status.
- For Costa Rican individuals
- Identification Number, ”Cédula de Identidad”, which has a 9-numeric digits format (x-xxxx-xxxx)
- For foreign individuals resident in Costa Rica
- Migration Identification Number, ”Documento de Identidad Migratorio para extranjeros” (DIMEX), which has an 11 or 12-numeric digits format (xxxxxxxxxxx or xxxxxxxxxxxx)
- For foreign individuals non-resident in Costa Rica
- Special Tax Identification Number, “Número de Identificación Tributario Especial” (NITE), which has a 10-numeric digits format (3-120-xxxxxx)
- For businesses
- Corporate ID number, “Cédula de Identidad,” which has a 10-numeric digits format (x-xxx-xxxxxx)
- For businesses non-resident in Costa Rica
- Special Tax Identification Number, “Número de Identificación Tributario Especial” (NITE), which has a 10-numeric digits format (3-130-xxxxxx)
- For individualsFormat: x-xxxx-xxxx
- For businessesFormat: x-xxx-xxxxxx
VAT on Digital Services in Costa Rica
In August 2020, Costa Rica introduced special VAT rules for digital services provided by non-residents. These suppliers should either register, collect and remit VAT or request that credit cards or financial institutions withhold VAT.
VAT Rate: 13% VAT is typically applied to the sale of affected digital services
Taxable digital services in Costa Rica: A digital service should be taxable in Costa Rica if a non-resident supplies it and the recipient is located there.
|Examples of taxable digital services in Costa Rica|
|Audiovisual services (e.g. music, videos, movies and games)|
|Broadcasting of events of any kind|
|Services provided through a digital platform|
|Services of long-distance teaching and/or training|
|Use or exploitation of non-tangible rights|
|Other electronic or digital services that are destined and/or delivered to users located within Costa Rica|
Will your business need to pay VAT on digital services in Costa Rica in 2023?
Marketplace & Platform Operator Rules in Costa Rica
A foreign intermediary in the supply of goods or services, such as an electronic platform or marketplace, should register with the Ministry of Finance and obtain a NITE, regardless of where the supplier and recipient are located.
Intermediaries should also have the following obligations:
- Keep their information updated with the Ministry of Finance.
- Identify the place of consumption or supply.
- When applicable, collect VAT.
- Submit the VAT return and remit payment.
Invoice Requirements in Costa Rica
The following details should be displayed on invoices in Costa Rica:
- The version of the document
- Full identification of the issuer
- The name of the type of document
- Consecutive numbering
- Numeric key
- Date of issuance of the electronic document
- Time of issuance of the electronic document
- Conditions of the sale or service
- Means of payment
- Detail of the goods or service provided
- Subtotal of the invoice in national or foreign currency
- The value of the services rendered expressed in national or foreign currency
- The value of the assets expressed in national or foreign currency
- Net sale price expressed in national or foreign currency
- Tax amount corresponding to each rate applied to the net sale price, with the indication “Impuesto al Valor Agregado”
- The total value of the invoice in national or foreign currency
E-Invoicing & Digital Reporting for Costa Rica
Costa Rica implemented mandatory e-invoicing in 2018. It is mandatory for all VAT-registered entities except for a) taxpayers registered in the simplified regime, b) taxpayers registered in the agricultural regime, c) religious institutions, d) condominiums, e) unions, g) the state, h) political parties, and i) public transport.
The Ministry of Finance manages the system.
E-invoices in Costa Rica must be issued in XML format and include a digital signature to guarantee the authenticity and integrity of the invoice. They must also include a unique identification number assigned by the Ministry of Finance.
Governmental Body Responsible for E-invoicing and Digital Reporting in Costa Rica
The Ministry of Finance, ”Ministerio de Hacienda”, through the General Directorate of Taxation (“Dirección General de Tributación” or DGT), is the governmental body responsible for invoicing in Costa Rica.
VAT Payments and Returns in Costa Rica
Full VAT Returns
|VAT Return Name||D-104-2|
|Filing deadline||15th of the following reporting month. However, if the deadline falls during the weekend or a public holiday, it moves to the next working day.|
|Payment deadline||Same as the filing deadline|
|Local VAT acronym||IVA|
Penalties in case of late filings or misdeclarations
In the case of the late filing of VAT returns and payments, the Costa Rican Tax Authority enforces the following penalties:
- Late filing: a penalty of 50% of the minimum monthly salary.
- Late payment: a penalty of 1% of the amount due for each month or fraction of a month of delay, but not to exceed 20% of such amount.