Tourism Exempted From Valued Added Tax (VAT) For A Year

The President of Costa Rica, Carlos Alvarado Quesada, signed the law that exempts the added sales tax (VAT) for tourist services that are registered with the Costa Rican Tourism Institute (ICT).

These will be exempt for the first two years of validity of Law 9635, Strengthening of Public Finances, of December 3, 2018, this according to the reform made in transitory IX of title V, chapter I.

It is established that they will be subject to a reduced rate of 4% during the third year of validity of Law 9635 (July 1, 2021), and to a reduced rate of 8% during the fourth year of validity of this law. (July 1, 2022).

Also, as of the fifth year (July 1, 2023), they will be subject to the general rate of value added tax.

The tax obligations accrued from July 1, 2020 until the entry into force of the reform contained in this law must be declared and paid to the Treasury in the terms provided in Law 9635.

See decree issued on August 19th, 2020 (DECRETO LEGISLATIVO N.0 9882 page 7 to 10)

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