Costa Rican VAT rates and VAT compliance

VAT in Costa Rica is administered by the Ministry of Finance (Ministerio de Hacienda) through the General Directorate of Taxation (DGT).

Costa Rica applies a standard VAT rate alongside a set of reduced rates for essential goods and services, and zero-rating for exports.

Some supplies are exempt from VAT in Costa Rica. These commonly include:

• Public health services provided by government institutions
• Financial services (in certain circumstances)
• Residential rental of property below the threshold established by regulation (currently set by reference to the minimum monthly salary)
• Certain cultural and non-profit activities

Exempt supplies do not generate output VAT and generally do not allow recovery of input VAT related to those activities.

There is no minimum turnover threshold for VAT registration in Costa Rica. All businesses carrying out taxable activities — whether selling goods, providing services, or importing goods — must register with the DGT upon commencing those activities.

Foreign businesses with a physical presence in Costa Rica must register under the general regime. Foreign digital service providers without a local entity may register directly or rely on credit card withholding. For B2B cross-border services, the reverse charge applies and the Costa Rican recipient self-assesses the VAT.

Get more information on VAT registration in Costa Rica.

VAT-registered businesses under the general regime must file monthly VAT returns. Filing is mandatory every month regardless of activity level, including months with zero sales.

• Monthly returns (Form D-150) are due by the 15th of the following month, filed electronically via TRIBU-CR.
• Quarterly returns (Form D-105) apply to businesses registered under the Simplified Tax Regime.

Returns include output VAT on sales and recoverable input VAT on purchases supported by validated e-invoices.

Get more information on VAT returns in Costa Rica.

Foreign businesses storing goods in Costa Rica must consider VAT registration obligations if those goods are held for domestic sale. Holding inventory within Costa Rica for resale generally requires the establishment of a legal presence and registration under the general VAT regime. Importing goods into Costa Rica also triggers VAT at customs clearance regardless of whether the importer has a domestic establishment.

VAT is generally payable on the importation of goods into Costa Rica.

• Import VAT is due at customs clearance and is calculated on the customs value of the goods plus applicable customs duties and other charges.
• The standard import VAT rate of 13% applies to most goods. Reduced rates apply to qualifying goods (such as medicines at 2% and basic food basket items at 1%).
• VAT-registered businesses may recover import VAT as input VAT, provided the goods are used for taxable activities and supported by the corresponding customs import documentation.
• Import VAT on goods used for exempt activities or personal consumption is not recoverable.

Foreign businesses supplying digital services — including software, streaming platforms, online content, SaaS, cloud services, and electronically supplied intangibles — to recipients in Costa Rica are subject to Costa Rican VAT at the standard rate of 13%.

Costa Rica introduced specific rules for nonresident digital service providers in August 2020. Foreign suppliers have two compliance options:

• Direct registration: Register with the DGT and collect and remit VAT directly on B2C supplies.
• Withholding mechanism: Request that Costa Rican credit card issuers and financial institutions withhold and remit the VAT on their behalf.

VAT-registered businesses under the general regime may recover input VAT incurred on taxable business purchases through their monthly VAT returns by offsetting input VAT against output VAT. Recovery requires valid, DGT-accepted e-invoices.

Nonresident businesses without a physical presence or registration in Costa Rica generally cannot recover Costa Rican input VAT. There is no nonresident refund mechanism equivalent to the EU’s 8th Directive scheme.

Costa Rica applies zero-rating to qualifying exports of goods and to services whose benefits are received exclusively outside Costa Rica. Zero-rating allows VAT to be charged at 0% while preserving the right to recover related input VAT, provided documentary requirements are met. Exporters with persistent input VAT surpluses may apply to the DGT for a refund of accumulated credits.

All taxable transactions in Costa Rica must be documented through e-invoices validated by the DGT. A compliant electronic document must include:

• Issuer and recipient name and tax identification number
• Description of goods or services, quantity, and unit price
• VAT rate and VAT amount applicable to each line item
• Total amount including and excluding VAT
• Unique electronic document key (clave) and date of issue
• Digital signature from a certificate recognised by Costa Rican authorities

Time-of-supply rules under Law No. 6826:

• Goods: VAT becomes chargeable at the earlier of the date of invoicing or the date of delivery of the goods.
• Services: VAT is due at the earlier of the date of invoicing or the date the service is provided.
• Imports: VAT is due at customs clearance.
• Advance payments trigger VAT at the moment of receipt.

Tax records — including e-invoices and supporting documentation — must be retained for a minimum of five years under the Código de Normas y Procedimientos Tributarios. VAT returns and payments are due by the 15th of the month following the reporting period.