Costa Rica Amends VAT Exemption
Costa Rica Amends VAT Exemption on commercial rents in response to the consequences of the COVID-19 pandemic.
Costa Rica issued Executive Decree 42.292-H, which is valid from April 14, 2020. The decree changes the rules for exemption from VAT when renting commercial activities for April, May, and June 2020. The government uses these measures as a mitigation of the adverse effect of COVID-19.
This novelty applies to commercial leasing of both real estate and movable property, including tangible and intangible property. In addition, it is stipulated that the landlord and tenant must be registered at the same time to pay VAT and submit their monthly returns, even if VAT is not paid. Formation of invoices in accordance with the rules is also mandatory. If the lessor collects VAT incorrectly, he must immediately refund the lessee.