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Costa Rica 3-month VAT payment deferral for coronavirus

  • Jul 21, 2020 | Richard Asquith

25 Aug - tourism-related services have been exempted from the standard rated 13% Value Added Tax until 1 July 2021. It will then become subject to a phased introduction - 4% till 30 June 2022; and 8% till 30 June 2023. The full standard rate will apply after this time.

21 July - The VAT rate on construction and related services has been reduced to zero until 30 June 2021. There will be tapering reintroduction until 30 June 2023.

17 July - the filing deadline for the June VAT filing has been moved from 15 July to 20 July.

24 June - The Legislative Assembly is reviewing a 3-month further payments holiday. This would cover July, August and September 2020.

10 June - parliament is reviewing a range of improved VAT deductions and import VAT reductions for the tourism sector.

7 June - Costa Rica VAT cut is being reviewed for a 1-year period. The rate would drop to 9%.

19 April update - The government has approved the 3-month payment deferal, and now includes the option to delay payment  until 31 December 2020.

23 March - The Costa Rican government has offered a three-month Value Added Tax payment holiday for all businesses to help support them through the coronavirus crisis. Follow Avalara’s live global coronavirus Covid-19 VAT measures tracker:

The measures agreed by the National Assembly include:

  • April, May and June payments of Value Added tax may be delayed until 31 December 2020. 
  • Excise and customs duties have also been put on hold.
  • VAT on commercial leases has been set to zero between April and June.
  • The Selectivo de Consumo tax is also delayed for the same period until the end of the year. This is levied on imported alcohol and tobacco.

In addition to VAT payment holiday, which starts 15 March, corporate income taxes and customs duties are suspended, too.

“Covid-19 is putting us to the test as a society. For this reason we want to give all Costa Ricans the absolute certainty that as an economic team we will be using all the available tools in our reach to alleviate the cash flow in the homes and companies, to prevent the destruction of employment and assure the availability of resources for the optimal sanitary attention of people”, explained María del Pilar Garrido Gonzalo from the Ministry of National Planning and Economic Policy (MIDEPLAN).

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara
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