Costa Rica Considers VAT Law Amendments Affecting Digital Payments and Withholding

• Costa Rican Legislative Assembly is reviewing Bill No. 24750 which proposes amendments to the VAT law
• The bill focuses on the VAT withholding process for acquirers and businesses involved in digital payment transactions
• Acquirers would need to withhold VAT from taxable income earned from local sales
• A 6% withholding rate would be applied to net sales amounts paid to affiliates, not including VAT
• The withheld amount would count as a prepayment for the affiliate’s VAT duties
• Exemptions are specified for taxpayers under the simplified tax regime
• Certain electronic banking transfers are excluded from the withholding requirements
• Sales or services by affiliates to the payment system are not subject to withholding
• The proposal includes clarifications on payment deadlines for withheld amounts
• Reporting guidelines for acquirers and penalties for non-compliance are also proposed
• The bill is still under consideration in the legislative process

Source: globalvatcompliance.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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