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Costa Rica’s Answer to Balancing Budget, Tax Tourists Even More

Article Summary:

The Ministry of Finance of Costa Rica sent to Congress this week another group of motions with more exemptions and amendments to the Draft Law on Solidarity Tax. Tourists will see faze in of the value added tax (VAT) as the Treasury proposed that is covered by a special VAT rate of 4% during the first year of implementation of the law, up to 10% in the second year and 14% in the third. Exempted from the VAT is land transport services for passengers and maritime traffic. this includes bus tickets, taxi fares and ferries.

Original Article Text From Revista Summa via Google Translate :

Costa Rica: Treasury Asks Staggering Rate Exempting Transportation and Tourism

The Ministry of Finance of Costa Rica sent to Congress this week another group of motions with more exemptions and amendments to the Draft Law on Solidarity Tax.

Among the most important are the request to be exempted from value added tax (VAT) on land transport services for passengers and cabotage (maritime traffic) with rates established by the Regulatory Authority for Public Services (Aresep ).
This includes bus tickets, taxi fares and the ferry, specified Maritza Hernandez, president of the National Carriers.

The project transforms the existing sales tax, which has a rate of 13% and is mainly applied to the goods, in an IVA, the amount increases to 14% and extending it to services.

For some of those offered by the tourism sector, the Treasury proposed that is covered by a special VAT rate of 4% during the first year of implementation of the law, up to 10% in the second year and 14% in the third.

Services include: car rental, trikes and quads, travel agencies and receiving stations, tour operators, tourist guide, tourist transportation and activities such as canopy, rafting, surfing, kayaking, boating, rope and bungee.

Also requested to exempt from VAT on fees that are applied to loans, invoice discounting credits, financial leases and operating leases finance function, the deposits from the public, the purchase, sale or exchange and similar services aimed currencies.

These exceptions will join 21 others already approved in committee and special fees also requested for the sport.

Finance Minister Fernando Herrero explained that after November 20 exemptions estimated that the project dealt with now generate an amount equal to 1.53% of production in the first year (about U.S. $ 596 million), instead of two , 5% (almost $ 994 million) that originally was intended to furnish.

With this plan is intended to alleviate a deficit this year will represent about 5% of production (just over one million million colones).

Quite satisfied. Some sectors were quite happy yesterday, but failed to everything they wanted.

Hernandez said he also called for tires and batteries exempts bus, VAT, but the Treasury refused. However, they reached the “bulk” of what they intended.
The National Chamber of Tourism (Canatur) exteriorized through a statement that the changes “will help to mitigate the impact in the industry produce direct application of VAT on tourism.”

However, said the system was intended to apply within six years and also walks, suspension bridges, climbing and visits to national parks and private reserves rate applied to them gradually, but the Treasury did not agree.

Anabelle Ortega, executive director of the Chamber of banks said they requested a correction of the motion requested that it not only exonerated the interest and fees on loans, but loans and credits for themselves.

Link to Original Article:

From Revista Summa

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