Indirect tax - Costa Rica

The Value Added Tax (VAT) in Costa Rica, or Impuesto al Valor Agregado (IVA), is a consumption tax for selling goods and services. As of 2025, the standard VAT rate in Costa Rica is 13%.

VAT Rates

Costa Rica employs a multi-tiered VAT system with various rates:

• Standard rate: 13% (applies to most goods and services)
• Reduced rates:
  • 4% (airline tickets and private health services)
  • 2% (medicines, private health services, private education services, private insurance premiums)
  • 1% (agricultural goods, essential food items, agricultural equipment, machinery, and supplies)
  • 0.5% (agricultural equipment, machinery, and supplies)
• Zero-rated (0%): Education services regulated by the government, residential electricity and water supply, terrestrial transportation services, books, and exports

The law stipulates exemptions to the basic goods basket, exports, medicines, veterinary products, agricultural inputs, books, and other goods. The importation of goods is taxed, but the importation of services isn’t.

When the vendor sells the good or the service to the consumer, the tax will be charged in the invoice. Consequently, the taxpayer is the final consumer, but the seller must withhold the VAT. Hence, the seller charges the GST on its sales and pays GST on its purchases, the difference between both will be the amount of GST payable to tax authority.

The non-resident suppliers of electronically supplied or digital services to resident consumers are not subject to GST in Costa Rica. The main reason is that importation of services is not taxable and they are not provided in Costa Rica as a frequent commercial activity.

To register a non-established business with the tax authority as a taxpayer, the non-established business must appoint a fiscal representative, who could be resident or non-resident in Costa Rica. Also, the non-established business must appoint a residential agent, who will receive all the communications.

Registration Requirements

There is no VAT registration threshold in Costa Rica. Businesses must register if they habitually or incidentally sell movable property, provide services, or import goods.
VAT Compliance

1. Registration: Companies must register for VAT upon making their first sale.
2. Filing: VAT returns must be submitted monthly by the 15th month for the previous month.
3. Record-keeping: VAT-related documents must be stored for at least 5 years.
4. Input VAT deduction: Taxpayers can deduct VAT paid on purchases (input VAT) from VAT collected on sales (output VAT), provided the purchases relate to their taxable activity.

GST returns and payment must be done on a monthly basis. The sworn statement of sales corresponding to the previous month must be submitted no later than the fifteenth calendar day of each month. At the moment of presenting it, the respective tax must be paid.

The failure of filling the statement or a late submission of the return will have a fine equivalent to fifty percent (50%) of the basic salary.

An informative statement of the purchases and sales of goods and the services undertaken in Costa Rica to the same person and for an amount higher than 2.500.000 colones (local currency).

Yes, penalties can be imposed for a range of errors or omissions, namely the late payment of the tax, resistance to administrative control or repeated failure to provide information to the administration.

No. There is no possibility to reclaim the VAT paid in other country.

A VAT invoice must include:
• full name of the owner or business
• registration number
• invoice number
• invoice date
• conditions of sale: cash, credit, etc
• name of the printer (imprint) and the identification data of the print out
• full name of the buyer or company name
• natural or legal identification number, if the buyer is a taxpayer
• detail of the merchandise transferred, or nature of the service provided, unit price and transaction amount expressed in national currency or foreign currency
• discounts granted
• subtotal
• amount of the selective consumption tax, when the seller is also a taxpayer of the indicated tax and the amount of any other tax
• the value of the services provided or merchandise, separating taxed and exempt
• net sale price (without tax)
• amount of the tax equivalent to the rate applied on the net sale price, with the indication ‘Sales Tax’ or the acronym ‘VAT’
• total value of the invoice.

Electronic billing is being implemented in the country and it is mandatory for businesses to issue, receive and keep the digital invoice of all sales of goods and services.

Not applicable.

Costa Rica applies exemptions and reduced VAT rates to support essential goods and services, promote economic sectors, and protect low-income populations. Below is a detailed breakdown:

Exemptions (0% VAT)

The following goods and services are entirely exempt from VAT:

• Necessities: Public transportation, residential electricity, water supply, and basic groceries (e.g., rice, beans, milk).
• Education: Public and private educational services, books, and materials.
• Healthcare: Medical services provided by public institutions.
• Exports: Zero-rate to encourage international trade.

Reduced VAT Rates

These measures balance revenue generation with social welfare and economic development priorities.

Special Considerations

1. Simplified Regime: Some taxpayers may qualify for the "Régimen de Tributación Simplificada" (RST), which covers VAT and income tax.
2. Non-resident businesses: Companies not domiciled in Costa Rica should register if they have a physical presence in the country or provide digital services.
3. Reverse-charge mechanism: When an intangible goods service provider or supplier is not domiciled in Costa Rica, the local taxpayer must issue an electronic voucher and withhold the corresponding tax.

Potential Changes

As of March 2025, there are discussions about potentially increasing the standard VAT rate to 15% later in the year. Businesses should be informed about any updates to the tax regulations.

A new tax services and filing platform, TRIBU-CR, is expected to go into effect this year.