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Published Monday, November 30, 2020
$1.6 million-plus collected in the first
month of new online sales tax
By the A.M. Costa Rica staff
During October, the first month of the new 13% of the value-added tax for online purchases, the government has collected $1,696,575, according to the Ministry of Finance.
According to the ministry, 68% of this amount was paid in dollars and the rest in colones.
"Amid the fiscal situation that the country is experiencing and the reduction in income as a consequence of the pandemic, this contribution becomes very significant for public finances," said Elian Villegas, the Minister of Finance. "We trust that the behavior shown by these economic activities is maintained in the coming months for the benefit of the country. "
The deadline for collection of 13% of the value-added tax, known as IVA, on purchases made online, was originally established to be applied beginning Aug. 1. But, that was moved to Oct. 1 because banks and companies had to finish the development of systems for the application of the tax, the ministry said.
The collection of 13% IVA will be applied to digital services generated in other countries. The tax also applies to the use of international platforms that have representation in the country.
International digital services are understood to be those provided by a company not located in the country through the internet or any other digital platform, such as Amazon, Uber, Hotels.com, HBO, Netflix, among others. The list of these companies can be reached at the Ministry website.
To collect this tax, two mechanisms were established:
• Direct collection by the digital service provider. In this case, the foreign company will charge the tax directly to the client. International companies that directly charge taxes must be registered with the Ministry of Finance in Costa Rica.
• Direct collection by debit or credit card bank issuers. In this case, banks will automatically charge the tax when detecting a payment made with a card, for each purchase made on international companies listed by the Ministry of Finance.
According to the Ministry, the list will be updated every six months with information on more companies charging IVA tax and those companies excluded from the tax.
The collection of the international digital services tax was established following the recommendations of the Organization for Economic Co-operation and Development, said Priscilla Zamora-Rojas, a representative of the ministry.
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