Taxes on Used Vehicles in Costa Rica

Under pressure from importers the government has lowered taxes for importing used motor vehicles, but diluted the reduction by increasing the notional taxable value.

Thursday, August 29, 2013

Car dealers in Costa Rica are asking for the establishment of a new formula for calculating taxes on used vehicles.

Entrepreneurs reached an agreement to suspend a blockade they had been holding on the North American highway and this Friday will meet with the chief of Finance, Edgar Ayales to hear his response to the taxes charged on used vehicles. "Let's hope that the Treasury helps us establish a new formula for calculating taxes on vehicles. If an agreement is not reached, we will return to the streets," said Cristian Salas, a representative of the Chamber for Used Vehicle Negotiators in Grecia.

Although the Ministry of Finance recently lowered the rate of selective consumption taxes for used vehicles over three years old, the measure has not caused the effects that the industry hoped for.

Vendors wanted reductions of between $600 and $2000, however, estimates by the Chamber of Used Car Importers reveal that the price of a Toyota Echo 2002 only decreased by $170, and a Nissan Sentra 2003 by only $220.

More on this topic

Costa Rica: Taxable Value of Used Vehicles Under Question

November 2014

Used car importers argue that the Treasury is using the 2015 value of cars as a reference price when establishing the value of used vehicles.

The Costa Rican Chamber of Automotive Companies and deputies from the Libertarian Movement have filed an lawsuit and asked to meet with the Ministry of Finance to complain about the methodology being used to calculate the taxable value of used cars.

Costa Rica: Selective Tax on Used Vehicles

August 2013

Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.

From a press release from the Ministry of Finance in Costa Rica:

The Ministry of Finance reported today that after reviewing the effects of the update of the value of the vehicles that has been in force since December 2012, the implementation of the new Law on Transit, and the small amount of economic activity of the vehicle import sector this year, the Unit has determined an adjustment to the tax rates applicable on selective consumption, in order to give coherence to the tax system between the new values ​​and the tax rate.

Costa Rica Reduces Hybrid Vehicle Tax

July 2013

The selective consumption tax charged on hybrid cars has dropped from 15% to 10%.

Among the reasons explaining the low penetration of hybrid vehicles in the Costa Rican market is the amount of taxes that are charged.

"New hybrid-electric vehicles under tariff headings 8703 and 8704, with cylinders not exceeding 2,000 cubic centimeters, will be able to benefit from a 20% reduction in the selective consumption tax," states the new provision.

Importers Demand Lower Taxes for Used Cars

July 2013

Sellers of used cars in Costa Rica believe there is discrimination in the way the Ministry of Finance estimates import taxes on cars.

According to Jose Carballo, president of the Costa Rican Automotive Chamber, the industry complains that 52% is charged for new vehicles, while used cars which are over six years old are charged 79%.

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