Costa Rica Explains VAT Refunds for Overseas Hotel Bookings

• Costa Rica says travelers who pay for overseas hotel stays through certain booking platforms with Costa Rican credit/debit cards may have 13% VAT withheld automatically, but the tax is refundable because the service is consumed outside Costa Rica.
• Refunds must be requested separately, either through the Tribu-CR online system or at tax offices; required documents include form D-402 and proof of withholding (such as a bank statement).
• The automatic withholding reflects a collection mechanism that cannot determine the stay’s destination in advance, not a substantive VAT charge on foreign hotel accommodation.
• Booking.com, Expedia, and Agoda.com were added to Costa Rica’s VAT collection list effective Sept. 8, expanding the register from 161 to 181 providers/intermediaries.
• Costa Rica has taxed foreign digital services used in the country since Oct. 2020, and the ministry wants platforms to register directly and charge the correct tax themselves rather than relying on card withholding.

Source: ticotimes.net

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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