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Costa Rica 13% VAT launch July 2019

  • Dec 6, 2018 | Richard Asquith

Costa Rica 13% VAT launch July 2019

Costa Rica has confirmed that it will introduce a 13% VAT regime to replace the existing 13% Sales Tax. The reform will include bringing services into the indirect tax net for the first time.

The new VAT system is due to be implemented from 1 July 2019. It will involve businesses charging VAT throughout the production chain till the final consumer, with the right to deduct input suffered in their regular VAT returns.

It is part of the ‘Law to Strengthen the Public Finances’, which was gazetted on 4th December 2018. The aim is to reduce the government’s 6% deficit to 4%.

VAT will also be levied on B2C digital services provided by non-resident providers – including Netflix, Google Play, Apple iTunes and Amazon Prime. There will be reduced VAT rates of 4% and 2% for certain essentials. Public transport, education and books will be exempted.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.