Is Tax Reform Coming to Costa Rica?

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VAT costa rica

Costa Rica News – Costa Rica is currently considering reform to its income tax and Value Added Tax (VAT) legislation which could see VAT rise to 15%.

A fiscal deficit reached last December (5.7% of GDP) and lack of resources in the Central Government means the country is in need of tax reform.

The proposed reform would expand the tax base by allocating a greater number of goods and services. The 15% will be imposed to foreign investments, specifically.

The president of the Inter-American Development Bank Luis Alberto Moreno has pointed out several times the need to promote tax reform in Costa Rica taking as example the actions taken by European countries such as Greece.

If approved, this reform would affect every private company, as well as some public ones such as the Costa Rican Oil Refinery, Costa Rican Electricity Institute, National Power and Light Company, Public Services Company of Heredia and the Administrative Board of Cartago Electrical Services.

The Costa Rican government plans to raise an additional 2% of GDP – about ¢600,000 million (1.125 billion US) – each year to solve the Central Government’s fiscal deficit.

Companies operating or looking to do business in Costa Rica must bear in mind the possible effects of this … continue reading

Via:: Costa Rican Times