Wednesday 18 May 2022

Electric cars will have tax exemptions for 12 more years

This initiative prevents zero-emission vehicles from being left without tax incentives since the current exemptions expire in 2023

Paying the bills

Latest

Pilar Cisneros: “The government should be totally open to the press”

QCOSTARICA - The press must have access to public...

Arrival of tourists from the U.S. and Europe recovers

QCOSTARICA - Costa Rica registered for April 2022 the...

Fifth wave of covid-19 advances at an accelerated pace; Infections rise 35% in the last week

QCOSTARICA - For the fourth consecutive week, Costa Rica...

Casa Presidencial orders secrecy in public institutions

QCOSTARICA - Jorge Rodríguez Vives, head of the Office...

U.S. Seeks to Bolster Latin American Economies to Curb Migration

Q REPORTS (Bloomberg) The Biden administration is working on...

RECOPE urges ARESEP to lower gasoline prices

QCOSTARICA - In another episode of their recent friction,...

Weather service forecasts more intense rains in Costa Rica from this Tuesday

QCOSTARICA -Starting this Tuesday afternoon and evening, an increase...

Dollar Exchange

¢669.05 Buy

¢674.88 small> Sell

18 May 2022 - At The Banks - BCCR

Paying the bills

Share

QCOSTARICA – Legislators approved on Wednesday, in first debate, the Incentivos al Transporte Verde (Green Transportation Incentives) bill, which extends the tax exemptions for electric cars until the year 2034.

The plan promoted by Partido Liberacion Nacional (PLN) legislators Roberto Thompson and Paola Valladares, extends the existing benefits to new electric cars and also includes used electric vehicles not older than five years.

- Advertisement -

The benefits include preferential rates in the payment of the Value Added Tax (VAT), property tax (which is part of the annual Marchamo), and the selective consumption and customs value.

The bill, which received the unanimous support of 39 legislators, will be approved before the legislative group finishes their constitutional period on May 1. The second and final debate is on the legislative agenda for Tuesday, April 19.

This initiative prevents zero-emission vehicles from being left without tax incentives, since the current exemptions expire in 2023, without meeting the goals of 37,000 electric cars on the streets of our country; barely 2,272 units have entered.

“It is a fundamental step in the effort that the country is making in terms of decarbonization, particularly in the use of clean energy to be able to advance in the elimination of the use of fossil fuels,” said Thompson.

The director of the Asociación Costarricense de Movilidad Eléctrica (Asomove) – Costa Rican Association of Electric Mobility, stated that “the electrification of transport generates multiple benefits for the environment, health and mobility of people, in compliance with the international climate commitments assumed by our country. For this reason, from Asomove we have supported and requested the Legislative Assembly to approve this reform, so that more people will have access to vehicles that do not pollute and that are zero emissions”.

These will be the new incentives

The Incentivos al Transporte Verde bill contemplates four tax exemptions for new and used electric cars, with an age of no more than five years. The benefits extend to the importation of batteries and other parts used by these vehicles.

- Advertisement -

VAT. The proposal establishes a preferential value added tax (impuesto sobre el valor agregado – IVA- in Spanish) rate for those who buy an electric vehicle regardless of its value. In the first year of validity of the law, 1% VAT will be paid. That amount will increase by one percentage point until it reaches 13% or the value added tax rate in effect at that time.

On the contrary, the incentive package that expires next year contemplates a total exoneration of this tax for cars with a CIF value (cost, insurance and freight) of less than US$30,000 when imported. Meanwhile, vehicles valued between US$30,000 and US$45,000 pay a 6.5% VAT rate. This mainly harms luxury vehicles and heavy machinery with electric technology.

Discount on the Marchamo. The property tax, which is paid annually as part of the Marchamo (the circulation permit), will be 0 the first year the legislation is in force. Subsequently, the discount will decrease 20% each year until the benefit expires and the owner must pay 100% of the amount corresponding to said tax.

Selective consumption. The initiative promotes a staggered rate for this tax for a period of 12 years. Electric vehicles will be completely exempt from the selective consumption tax during the first three years of the law’s validity. The rate will rise 7.5 percentage points every three years, until reaching the current rate of 30% for this tax.

- Advertisement -

With the current legislation, however, cars with a CIF value of less than US$30,000 are exempt until 2023. For those ranging from US$30,001 to US$45,000, it is 7.5% and for those from US$45,001 to US$60,000, 15%. Those worth more than this have no benefit.

Customs value. The same mechanism will be implemented for the payment of this other tax when importing any electric technology vehicle. The first three years the exemption will be total, then it will rise 0.25 percentage points until reaching the current rate of 1%.

In the case of the current law, the exemption from this tax is total, until 2023, for all electric vehicles of less than US$60,000.

 

- Advertisement -
Paying the bills
Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

RECOPE urges ARESEP to lower gasoline prices

QCOSTARICA - In another episode of their recent friction, the Refinadora...

When can foreigner residents renew their DIMEX again?

QCOSTARICA - Costa Rica's immigration service, the Dirección General de Migración...

Subscribe to our stories

To be updated with all the latest news, offers and special announcements.