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Costa Rica: Tax developments in response of COVID-19

General Information

This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).

The content will be updated on a regular basis. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.

Date accurate as of: 11 May 2020

Customs measures for working from home for Free Trade Zone entities. (In effect). 

The General Customs Administration established the applicable criteria for the transfer of fixed assets outside the authorized area for Free Trade Zone entities, with the aim of facilitating the work from home of their employees, during the sanitary emergency the country is facing.

The applicable rules are as follows:

  • It authorizes the transfer of computers and necessary equipment outside the authorized area, for the execution of work functions.
  • The beneficiary companies must carry out a control and registration that details the identification number of the asset, name and identification of the assigned person, as well as the address or place of working from home and communicate it immediately to the corresponding Customs Office. 
  • The telecommuting must comply with the provisions contained in Law number 9738 "Law to Regulate Working From Home".
  • The beneficiary companies will be responsible for the damage, theft or loss of equipment that will be removed from the authorized Free Trade Zone area, being obliged to pay the corresponding taxes within 15 days, except in cases of force majeure or fortuitous events.
  • The measures will be applied while the National Emergency Decree remains in force.

Tax moratorium on payments of income tax, VAT and customs tariffs has been introduced.

On March 29, 2020 additional Guidance regarding the tax relief measures were released.

Regarding VAT and selective consumption taxes:

  • The tax relief applies for tax payments due in April, May, and June.
  • If the amount of the tax declared for these months is paid in full by 31 December 2020 (whether paid in a single payment or in installments), no interest or late-payment penalties will be imposed.
  • Taxpayers must still comply with the tax return or tax declaration requirements.
  • It has been clarified that "commercial activity" refers to all economic or for-profit activities and that the VAT exemption applies to both the lessee and the lessor to the extent those are registered as taxpayers.

Regarding income tax:

  • Taxpayers may forgo making partial payments corresponding to the months of April, May, and June without petitioning the tax administration, and no penalties will be assessed.

Additional Information

Costa Rica’s tax authorities and tax court have suspended the ability of taxpayers to have “in-person” meetings or presentations.

  • The executive decree (no. 42271-H) was amended with effect from April 14, 2020 to clarify that the VAT exemption for commercial leases (including leases of immovable or movable property) applies with regard to tangible or intangible goods. 

Additional Information

Individual Income Tax

Employees can make eligible withdrawals from their defined contribution plans if their labor contracts have been terminated, temporarily suspended or their salaries have been reduced.

After the eligible employee’s application is filed and approved, the amount available to the employee is that which is available under the defined contribution plan at the time of termination, contract suspension or salary reduction.