Costa Rica: Update on VAT and cross-border digital services

Costa Rica: VAT and cross-border digital services

The general tax administration issued guidance (DGT-R-27-2020, dated 22 September 2020) providing adjustments to the original guidance regarding the collection of value added tax (VAT) on cross-border digital services.


The tax administration previously provided a list of digital platforms and, thus, transactions that are subject to VAT. Transactions of digital platforms that are not listed will not be subject to VAT. Read TaxNewsFlash

Among the modifications in the September 2020 guidance are those regarding the requirements and obligations of credit card and debit card issuers and include:

  • Modifications to article 16°—the requirement to collect VAT on purchases of international digital services is to be performed once the transaction is recorded on the card holder’s credit or debit balance (before this modification, the VAT collection was to be performed as soon as the transaction was electronically authorized).
  • Modifications to article 20°—card issuers must comply with a new requirement to prepare and provide a transaction report to the Directorate of Tax Collection (Dirección de Recaudación) three times a year. This report must reflect all of the processed transactions relating to international digital services, regardless whether the transactions were subject to VAT.

Finally, the guidance includes an amendment to appendix N°6 that lists the names of digital service providers and entities that are subject to the VAT collection rules. In some instance, the entity name may be modified.

Read a September 2020 report (Spanish and English) [PDF 81 KB] prepared by the KPMG member firm in Costa Rica

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