Costa Rica: 2% Retention on transactions with credit cards

An injunction which since November suspended retention of 2% as an advance payment for tax on card transactions, has been declaration void.

Monday, January 19, 2015

The General Department of Taxation, at the Ministry of Finance announced that the measure will be effective immediately. "... The retention will be applied on 88% of the amount of each transaction, so effectively the amount withheld is 1.78%. "

Elfinancierocr.com reports that "... Taxpayers in the simplified scheme, fuel sales, public transport, and taxpayers exempt from partial payment of rent, need not comply with this provision. "

"... The present administration's aim with this retention is to improve tax collections, making the tax system more progressive and ensuring greater control of taxation. "



More on this topic

Costa Rica: Retention of 1.77% on Card Payments

November 2014

Bankers and businessmen are pressuring the government to remove the guideline which aims to retain 1.77% of each transaction as advance payment of income tax, scheduled to start on December 1.

The private sector argues that "...The decision of the Directorate General of Taxation (DGT) ignores the fact that neither card issuers nor financial institutions in the country can be considered as 'withholding agents' as this must be defined by the appropriate Act. "

Costa Rica: 2% Retention on Card Payments Postponed

October 2014

The Ministry of Finance has postponed until December 1 the beggining of the 2% tax which will be retained by financial institutions on card transactions.

The aim of this extension is to give banks more time to adapt their systems and make adjustments seeing as they are the entities that must make the retentions.

New Taxes Approved in El Salvador

August 2014

As part of the tax reform promoted by the government a tax has been approved on financial transactions and changes have been made to income tax.

From a statement by the Legislative Assembly of El Salvador:

Companies with more than $150,000 in sales a year will pay a minimum tax rate with the new tax reforms.

Costa Rica: Income Tax Statement by Internet only

September 2011

Starting this year, taxpayers must use the EDDI software for filing income tax.

According to the website of the Ministry of Finance, the electronic tool (EDDI – Digital Processing of Tax Returns) allows taxpayers to submit the following tax forms
- Declaration of Income tax D.101

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