Costa Rica Tax Authority Announces Implementation of 13% VAT for Registered Tourism Service Providers

The Costa Rica Tax Authority recently released an important notice on the Ministry of Finance website, aiming to remind taxpayers engaged in providing tourism services and duly registered with the Costa Rican Tourism Institute (ICT) of the upcoming changes. Effective from 1st July 2023, these taxpayers will be required to apply a 13% Value Added Tax (VAT) to their services.

The introduction of this new VAT charge comes as a result of the termination, on 30th June 2023, of the differentiated tax treatment previously granted to tourism services offered by taxpayers who were duly registered with the ICT.

The inclusion of VAT on tourism services was initially established by Law No. 9882, specifically under Transitory Disposition IX of Law No. 9635, along with Transitory Disposition IX of the Regulations to the VAT Law.

By providing this notice, the Costa Rica Tax Authority seeks to ensure that taxpayers in the tourism sector are aware of their tax obligations and are prepared for the implementation of the 13% VAT on their services. The proper application of this tax will contribute to the government’s revenue and facilitate the country’s overall economic development.

It is essential for all eligible tourism service providers to take the necessary measures to adjust their invoicing and financial systems accordingly, ensuring compliance with the updated tax regulations. By doing so, they will avoid potential penalties or legal issues that may arise from non-compliance.

The Costa Rica Tax Authority remains committed to assisting taxpayers in understanding and adhering to the country’s tax laws. Further information and guidance on the implementation of the 13% VAT for registered tourism service providers can be obtained through the Ministry of Finance and the Costa Rican Tourism Institute (ICT).