COSTA RICA NEWS – The Ministerio de Hacienda (Tax Department) says it will use the internet, media advertising and “different” ways to track homeowners who rent out their properties to tourists to ensure they are charging the 13% sales tax.
This week, Hacienda clarified that all property owners who rent out their properties, ie house, condo or apartment for less than 30 days, much collect and submit the 13% sales tax on the rent.
“There are areas of the country where the hotels and lodges are suffering from unfair competition meaning all the rental homes. These are houses that are rented without filing taxes, without paying anything …, ” said Fernando Rodriguez, Deputy Minister of Hacienda.
Rodriguez said he realizes the situation will have an impact on the end user, but is important that the informal sector doesn’t destroy the formal (hotels, resorts, lodges, etc, ) all who apply taxes.
The deputy minister said that Hacienda will be reviewing websites, social media networks (ie Facebook, Twitter, etc), newspaper and other media (ie Craigslist) advertising to identify properties being offered for short term rentals (less than one month) and the relation to the owner, with the objective of assuring that the sales tax is collected and remitted.
Hacienda is not concerned if it is a foreigner or national renting, just that the sales tax is applied. Rodriguez added that based on the information collected, Hacienda will be making an annual check and if the tax is not declared, owners will be exposed to sanctions. “This also applies to companies,” said Rodriguez. Many properties are held in corporations.
The official said the amount to be collected is unknown, Hacienda does not yet have an estimate of how much could be raised by the application of the sales tax on this type of rental.
The deputy minister admitted that it will be difficult to detect properties in non-tourist areas.
“We are gathering information, because there are much more properties than anticipated at first,” said the deputy minister.
“We are already making traces for income tax purposes, once we have it we will add it to includes sales tax. The Instituto Costarricense de Turismo (ICT) and other tourism chambers said they could provide us information on the subject,” said Rodriguez.