New digital services must pay 13% VAT in Costa Rica
Starting this Tuesday, September 8, Costa Rican users of various international digital platforms will see an adjustment in their costs. The Ministry of Finance has updated its list of foreign providers subject to the Value Added Tax (VAT), incorporating artificial intelligence, entertainment, and travel services into the 13% tax scheme.
With this measure, the official list rises to 181 platforms, consolidating an effort by the General Directorate of Taxation to adapt tax collection to the dynamism of the current technological market.
Main platforms reached
The update includes tools that have gained great popularity recently. Among the most notable are:
- Artificial Intelligence: OpenAI/ChatGPT, Claude, Anthropic and Grok.
- Travel and Lodging: Booking.com, Agoda.com and Expedia.
- Entertainment and Video Games: PlayStation Network and Nintendo.
What the General Directorate of Taxation did was update the resolution by incorporating new platforms, understanding that this is part of the technological dynamism and change where previously there was not, for example, artificial intelligence and there were not certain services associated with this technology as there are today.
Víctor Carvajal, Deputy Minister of Revenue
Impact on the consumer’s pocket
For the end user, the impact will be a 13% increase on the price of the service. For example, on a $20 monthly subscription, the tax would represent an additional charge of $2.60, provided that it has not been previously collected by the provider.
Collection is mainly executed through two channels:
- Bank withholding: When the provider is not registered in the country, 13% is applied directly when making the payment with credit or debit cards.
- Direct registration: The tax authority encourages foreign companies to register formally so that they are the ones who manage the collection and transfer of the tax in a simplified manner.
It is important to highlight that, in the case of platforms like Booking.com, the tax is applied to the platform’s intermediation service. This means that the levy falls on the user even if the final service, such as a hotel reservation, is enjoyed outside of Costa Rican territory.
For those users who act as VAT contributors, the amount paid for this tax could be used as a tax credit, which could mitigate the financial impact depending on their specific tax situation.
