Airbnb, HomeAway, and Vrbo will pay 13% VAT from November in Costa Rica

Costa Rica’s Directorate General of Taxation will include, from November 1, the services of Airbnb, HomeAway, and Vrbo in the list of cross-border digital services to which the 13% value-added tax (VAT) rate must be applied.

The decision is part of actions to improve tax collection, the tax administrator reported in a statement.

Cross-border digital services are those provided by a non-domiciliary provider in Costa Rica through the Internet or any other digital platform consumed from Costa Rican territory.

The 13% VAT levy on these services began on October 1, 2020, and applies to the acquisition of cross-border digital services made by end consumers or VAT taxpayers to a domiciliary supplier outside Costa Rica to be used or consumed in the Central American country.

CROSS-BORDER DIGITAL SERVICES

These new services are added to the tax list prepared for Costa Rican banks to charge 13% VAT on cross-border digital services in compliance with the applicable legislation.

With this list update, the country reaches 136 services provided by companies domiciled outside Costa Rica, which will strengthen the VAT collection potential, said the Treasury.

According to article 17 of resolution DGT-R-013-2020, the tax administration is empowered to include or exclude suppliers or intermediaries by simply publishing the updated list on its website.

List of cross-border digital services taxed at 13% VAT:

With information from Bloomberg

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