Costa Rica: VAT exemption for commercial leases (COVID-19)

Costa Rica: VAT exemption for commercial leases

An exemption from value added tax (VAT) for commercial leases has been clarified. The VAT exemption is in response to the coronavirus (COVID-19) pandemic.


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An executive decree (no. 42271-H) has been amended to clarify that the VAT exemption for commercial leases (including leases of immovable or movable property) applies with regard to tangible or intangible goods. 

The clarification was needed because the decree originally only referred to leases of commercial real estate. Read TaxNewsFlash

With the clarification, the "commercial activity" refers to all economic or for-profit activities. For the VAT exemption to apply, both the lessee and the lessor must be registered as taxpayers.

Read an April 2020 report (Spanish and English) [PDF 140 KB] prepared by the KPMG member firm in Costa Rica

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