The Costa Rican Government announced that as of this August 1st, digital trans-border services will be charged 13% as corresponds for the value added tax (VAT).

The same rule will apply to the purchase of intangible goods by final consumers of VAT contributors to a provider that is located out of Costa Rica and for use or consumption in this country.

Digital trans-border services encompass all those that are offered by a provider not located in the country through the internet or a digital platform to consumers in Costa Rican territory.

These include: Netflix, Airbnb, Uber and Amazon, among many others.

The charge of this tax can be done through two mechanisms: directly by the service provider or using a debit or credit card.

Consumers of these digital services or intangible goods that are VAT contributors and use the invoices provided by the vendors or international service providers as a backup for their purchases.

“The resolution related to the charge and collection of VAT over digital trans-border services, seeks to establish in a detailed manner the guidelines to follow and the formal and material duties that service providers must follow as well as the issuers of debit and credit cards who are responsible of charging this tax as established by the VAT Law. This resolution sets a specific date in which the VAT will be charged for these type of services, following the recommendations of the OECD in order to face the challenges that come with taxing digital economy”, stated Priscilla Zamora Rojas, general director of Treasury in Costa Rica.

This also poses some questions in relation to the legality of some of these services in the country such as UBER.

“This sign of legitimacy allows us to strengthen our commitment to the country and to continue seeking a regulation that puts the interest of the user in the center of the discussion, and that provides a platform with higher legal security that offers the more than 28,000 collaborators an opportunity to continue having a livelihood”, mentioned UBER through a press release.

A preliminary list of the digital service providers that this regulation applies to is included in the images.