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Costa Rica Simplifies VAT For Agricultural Businesses

Friday, October 4, 2019

Costa Rica introduced a simplified VAT compliance regime for agricultural businesses and their services providers from October 1, 2019.

Costa Rica introduced VAT on July 1, 2019. The new VAT has a broader scope than the previous sales tax, in applying to services as well as goods. It was legislated for in Law No. 9635 of December 3, 2018.

The Ministry said the new regime for the agriculture sector is intended to simplify arrangements for the sector, to boost voluntary compliance rates, and cater to the industry's cyclical activities.

According to the Ministry, the regime enables covered businesses to issue electronic invoices, in a bid to simplify record keeping, and enables coffee and cane producers and beekeeping businesses to file a single annual return, while other agricultural businesses and fishing businesses will file every four months.

Agricultural services providers will be able to voluntarily sign up to the simplified regime.

Agricultural production or fishing businesses must be registered with the General Taxation Directorate as taxpayers and with the Ministry of Agriculture and Livestock. Agricultural service providers need only register with the Ministry of Finance.