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VAT Registration in Costa Rica

VAT Registration in Costa Rica

Starting a business in Costa Rica implies completing several steps and one of the most important is VAT registration. The procedure is connected to the value added tax (VAT) which is one of the largest contributions to the country’s Gross Domestic Product. Fortunately, the process is the same for both local and foreign companies with operations here.

Find out below how to register for VAT in Costa Rica. Our company formation specialists are at your service with complete support during the registration process. We can also help you with setting up a company here.

VAT registration for foreign companies in Costa Rica in 2024

Foreign companies have two options to set up operations in Costa Rica: the branch office and the subsidiary. Between the two of them, the subsidiary is created as an independent entity, therefore, will be subject to the same process for VAT registration as local enterprises. So, we will focus next on how to obtain a Costa Rican VAT number of foreign businesses operating through branches.

Here are the main aspects to consider for VAT registration in Costa Rica as a foreign entity in 2024:

  • there is no minimum registration threshold, therefore, the branch must obtain the VAT number right after being incorporated;
  • there is no need to appoint a tax agent when filing for VAT registration in Costa Rica, the procedure can be carried out by one of the directors;
  • in terms of documents, the tax agency will require an application form and details about the company.

The main aspect to consider when registering for VAT as a foreign entity is the requirement of having a legal address in Costa Rica, which can be obtained under the form of a virtual office in the beginning.

Even if without the requirement to appoint a fiscal representative, many foreign business owners decide to hire local accountants to handle the VAT registration in Costa Rica, as well as to represent them when filing VAT and tax returns.

Feel free to request our services if you need support with registering for VAT in Costa Rica in 2024. We are also at the service of foreign investors who want to move to Costa Rica to run their businesses from here.

VAT registration support for local companies in Costa Rica

Our Costa Rican company formation specialists are also at the service of local and foreign investors who want to open companies here in 2024 and must register them for VAT. The procedure is fairly simple and can be completed in just a few days.

In terms of documents to be drafted, these imply the standard application form issued by the Ministry of Finances and information about the company, such as the name, legal address and business identification number.

VAT rates in Costa Rica

In Costa Rica, the general value added tax (VAT) rate is 13%. This rate is applicable to both goods and services, including imports. However, there are also reduced rates that apply in the following cases:

  • for foreign trips, air tickets are subject to a 10% fee;
  • for domestic trips, the air ticket is subject to a 4% rate;
  • a 2% rate is applicable to both medications and the necessary equipment and raw materials needed to manufacture them.

Certain products that are part of the “Basic Taxable Basket”, like bread, milk, fruits, soft drinks, etc., are subject to a 1% rate. Supplies for agriculture, livestock, veterinary care, and non-sport fishing are also subject to the 1% tariff. Books and export items are subject to a 0% rate.

VAT compliance in Costa Rica

At the level of 2024, the VAT compliance regulations remain the same for all companies, local or foreign, namely:

  • once making the first sale, a company must register for VAT in Costa Rica and collect the due tax;
  • the standard rate of the value added tax is 13%, without any reduced quotas;
  • VAT returns must be filed on a monthly basis, more precisely by the 15th of the current month for the previous one;
  • VAT-related documents must be stored by companies for a minimum period of 5 years.

If you need more information about VAT registration in Costa Rica in 2024, do not hesitate to get in touch with us. Our experts are at your disposal with various services among which support in obtaining a tax and VAT number and opening a company in Costa Rica. Additionally, if you are a foreign citizen who wants to immigrate to Costa Rica, we have a team of dedicated lawyers ready to assist in such matters.