E-Commerce: Tax Exemptions in Costa Rica

Once Cauca IV comes into force, Costa Rican consumers will be exempted from paying duties on Internet purchases made abroad by Costa Rican consumers that do not exceed $500.

Tuesday, March 23, 2021

The fourth version of the Central American Uniform Customs Code (Cauca IV) will take effect as of May 1 and according to Costa Rican authorities, the exoneration of duties will only apply to family shipments.

See "E-Commerce: Trends at the Beginning of 2021"

While the exemption already applies today, there are many limitations, as consumers who buy online and bring their products through courier companies, can only apply to the elimination of tariffs once every six months.

Gerardo Bolanos, general director of Customs, told Elobservador.cr that "... 'the current application is via a criterion that makes an interpretation, in my opinion, not so extensive and that is what is being applied. With Cauca IV, it is defined which are the goods that are exempt from payment and are family shipments."

Also see "How do Purchasing Intentions Evolve?"

Specialists predict that this exoneration may lend itself to dumping practices, because although the amount established seems insignificant, local illicit trade has found ways to circumvent the rules, such as using several people to exempt themselves from paying taxes.

Bolanos believes that this new measure could encourage Dumping. The director of Customs explained that "... 'It is not possible that, in the framework of the economic reactivation, you buy a shoe, exempt from taxes, and not in a store that pays taxes, to its employees, electricity. Dumping? Absolutely."

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More on this topic

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Lincoln Plaza began operating a virtual platform in which customers can purchase products that are sold in the physical stores that already operate in the property.

EPK, Uno Sports, Claire's, Totto, Xiami, Miniso, TOYS, Liberia Internacional, Opticas Munkel, Aldo Nero, Ibiza and GNC, are some of the stores that will offer their products through the new digital platform.

E-Commerce Boom = Business Culture Changes

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The transformation of purchasing habits caused by the boom in e-commerce at a regional level, forced companies to accelerate the process of implementing their plans, because now they must enhance their digital strategies and change their business culture.

The outbreak of covid-19 and the restrictions to the mobility of people, caused the ideal scenario for the first eight months of the year in the Central American markets to report a clear upturn in interest in e-commerce services, with Guatemala, El Salvador, Honduras and Panama being the countries that registered the greatest increases in interactions associated with the topic.

Guatemala: SAT to Audit Online Sales

July 2020

The Superintendence of Tax Administration announced that it will audit companies that pay less than the sector average, that do not invoice and that have sales in different social networks.

The country's tax authority has turned its attention to online commerce, since in this new business context and change in consumption habits, Internet sales have increased exponentially.

Internet Shopping Drops in Costa Rica

August 2013

The number of online purchases has dropped since the Treasury placed restrictions on tax exemptions at the end of 2011.

The total number of packets handled by courier companies during the first half of 2013 was 19,313, far from the levels seen in the same period in 2011, when they totaled 26,089, but better than in 2012, when there were 13,879.

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