Costa Rica: Tax Removed from Tips

A law passed by Congress states that income from tips should not be considered as part of a salary, and therefore should not be subject to taxes.

Wednesday, December 19, 2012

An interpretive ruling of the Constitutional Chamber of Costa Rica had endorsed the view of the authorities of the Social Security Department, which includes tips in salaries on which social security contributions are calculated, both those paid by the employee and the employer.

Both waiters unions and businesses such as hotels and restaurants are opposed to this approach, which involves taking away income for some, and increasing costs for others.

The project also plans to ban employers from taking out of tip money any payments for damage to the premises caused by waiters, and in addition tips may not be retained for more than a week when the payment was made in cash, and no more than one month for payment by credit or debit card.

More on this topic

Guatemala Charges VAT on Tips

March 2014

The Tax Authority has confirmed that these bonuses must be added to bills.

Under a proposed amendment to the Tax Update law, tips must be taken into account when calculating Value Added Tax (IVA by its initials in Spanish).

The Tax Authority has determined that "Taxpayers who give bills for sales or services must include the amounts paid to them by their clients including tips.

Nicaragua: Tips Should Be Voluntary

August 2013

The business community believes that tips in restaurants and hotels should be voluntary and not included on bills.

The president of the Superior Council of Private Enterprise (Cosep), Joseph Adam Aguerri and Eduardo Fonseca, executive director of the Chamber of Commerce of Nicaragua (Caconic) agree on the matter.

Costa Rica: Employers Offer Pay Rise of 3.62%

October 2012

Costa Rican business chambers have proposed to the National Wages Council a 3.62% increase in wages for the first half of 2013. reports that "The Costa Rican Union of Chambers and Associations of Private Business Sectors (UCCAEP) proposed to the National Wages Council an increase of 3.62% for the private sector minimum wage to be effective for the first half of 2013. "

Costa Rica: "Mandatory" Tip Increases Costs

May 2011

The Chamber of Hotels & Restaurants is continuing its attempt to eliminate the mandatory gratuity on bills.

The tax, equivalent to 10% of the invoiced amount for food and accommodation services in restaurants and hotels and referred to as a tip, is income that should be distributed among employees. However, many operators do not pass the money on to their staff.

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