Costa Rica: VAT on Digital Services

In Costa Rica, the Ministry of Finance proposes to apply VAT to services such as Netflix, Airbnb, Tinder, Skype, PlayStation Network and advertising on social networks, among others.

Tuesday, December 3, 2019

According to a resolution of the Ministry of Finance that should be in consultation in the coming days, credit card issuers would be required to receive the 13% tax.

The list of digital services objects of the collection of VAT amounts to 190, as some are repeated, as companies use different names at the time of billing their customers.

Elobservador.cr reviews that "... Also included in the list are streaming services or payments through social networks, including HBO Store, Google Play, Amazon Video, Amazon Prime, Facebook, Twitter, Instagram and Sky.com, which has exclusivity to broadcast some sporting events. Also included are media such as the Financial Times and the New York Times."

The plans of the authorities is that over time the issuers of cards no longer charge the tax, since the platforms would have to be registered to make the collection directly. According to the proposal, at the time a service provider registers for payment of the tax, no other tax obligations would apply.

The article adds that "... The registration by the supplier or intermediary, will not generate obligations relating to other taxes other than those linked to their status as VAT taxpayer, including the obligation to register as taxpayers of other taxes. Nor does it constitute a permanent establishment for profit tax purposes', according to the resolution."

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Costa Rica: VAT on Telecommunications

March 2015

Requests have been made for the clarification of which telecommunications services are to be taxed with VAT, since it is unclear whether it is information services or telecommunications which would be taxed.

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Value-Added Tax in Costa Rica

August 2010

Inevitable fiscal reform will include the implementation of a value-added tax (VAT), which is basically an extension of the existing Sales Tax.

While a sales tax is only on transfers of merchandise and certain kinds of service, VAT is a generic consumption tax on the sale of all goods and services. Usually exemptions and reduced rates are defined for goods and services that form part of the so-called basic shopping basket.

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