Tuesday 2 March 2021

Taxation Evaluating Asking The U.S. For Information On Airbnb Hosts in Costa Rica

Airbnb says it has more than 7,700 hosts in Costa Rica and in the past 12 months some 260,000 visitors have used Airbnb in the country

Airbnb says it has more than 7,700 hosts in Costa Rica and in the past 12 months some 260,000 visitors have used Airbnb in Costa Rica

Although Airbnb has offered to collect the sales tax for transactions made on rentals in Costa Rica through its platform, the Costa Rica tax man is evaluating asking the United States for information on American citizens who are hosts in the country.

The Dirección General de Tributación Directa del Ministerio de Hacienda (Directorate General for Taxation) says it will to explore all alternatives in case it cannot reach an agreement with the company for information of its hosts in Costa Rica.

- Advertisement -

The Director of Taxation, Carlos Vargas, explained that his department requires people who rent property in the country to register as taxpayers, to be able to charge them the payment of taxes, both sales tax and income tax.

Vargas added that any request made to the U.S. authorities is possible through the application of the international agreements of exchange of information that it has in force with other tax administrations.

For now, Vargas only mentioned making the request to U.S. authorities.

In August 2016, Shawn Sullivan, Airbnb’s Director of Public Policy for Central America and the Caribbean, proposed the collection and remittance of the sales tax on all transactions carried out in the country through its digital platform.

- Advertisement -

Sullivan said, at that time, the request made by Taxation was for the company to provide information on all of its hosts in Costa Rica.

However, Sullivan emphasized that this is not possible because of policies of protection of personal data which the company must comply with its users, both for landlords and for guests.

The Director of Taxation stressed that the protection of personal data to which the company refers to does not apply for tax purposes.

Sullivan said that he has not communicated or met with representatives of the Government of Costa Rica in search of a tax collection agreement since that meeting in August of 2016.

He added that as a representative of the firm he urges all Airbnb hosts to comply with the law and pay income taxes as they should.

According to Sullivan, the collection mechanism proposed by Airbnb in Costa Rica is at the moment applied in 300 cities in different parts of the world; the most recent Mexico D.F, in an agreement reached last week with Mexico authorities.

- Advertisement -

The law
In January of this year, Taxation announced changes to the Law to Improve Fiscal Fraud Control (Ley para Mejorar la Lucha contra el Fraude Fiscal (N.° 9416), that rentals for less than one month are subject to sales tax. The current sales tax is 13%.

Thusm the law must be complied with by anyone who rents a real estate property for less than a month. In the view of Taxation, hosts renting through Airbnb must also report the economic activity, as well as lessors who use any other channel.

At the moment, Taxation is making a call to all landlords of any real estate rental for less than a month, whether Airbnb or not, comply with the law.

By the numbers
Airbnb, says it has a supply of affordable housing in Costa Rica that equals to 18% of the hotel supply.

Airbnb says it has some 7,700 hosts in Costa Rica, each earning an average of US$2,600 annually.

The company says approximately 260,000 visitors used Airbnb in Costa Rica during the last 12 months, and the typical host rents their property 23 days a year.

In addition, more than 105,000 Costa Ricans used Airbnb in both Costa Rica and abroad as an accommodation option.

Final words
The Airbnb representative in Costa Rica reports there has not been a drop in the number of hosts in the first four months of this year since the changes in the law, and does not expect a downward impact on the number of hosts it has.

“Airbnb is part of the collaborative economy and many people who can not afford a hotel or very high prices are looking for it as a good alternative of hosting in the countries,” said Sullivan.

For Vargas, if Taxation cannot reach an agreement with the company, it will have to resort to ask for outside information of foreign taxpayers in the country, as foreign governments do of Costa Rican taxpayers.

 

 

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

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

Netflix, Amazon and other digital platforms will be more expensive on August 1

(QCOSTARICA) Either through the provider directly, or card issuers, Netflix, Tinder,...

MOST READ

Bukele is on track to obtain a majority in the Congress of El Salvador

Q24N - The Nuevas Ideas (NI) party of President Nayib Bukele and partner Gran Alianza Nacional (GANA) party would obtain at least 56 of...

Costa Rica expects to receive $2.5B in international loans

QCOSTARICA - Borrowing its way out of the current financial crisis seems to be objective for the Carlos Alvarado government. Obtaining about US$2.5 billion this...

Costa Rica extends restrictions of its land borders until April 1

QCOSTARICA - Costa Rica will extend the restrictions of its land borders until April 1, confirmed Casa Presidencial (Government House) on Thursday. As in the...

Legislator criticizes “spectacle” of the Government with vaccines: It is ridiculous to have the President on the airport runway

QCOSTARICA - Legislator Ricardo Benavides lashed out on Tuesday that in the midst of the efforts to advance with the covid-19 vaccines the Government...

Discovery Channel began filming the second season of “Reversed” in Costa Rica

The filming of the second season of the reality show “ReverseD” on the Discovery Channel officially began last Sunday, February 21, in Atenas, in...

Franklin Chang: “Space Agency Doesn’t Have to Be a Bureaucratic Elephant”

QCOSTARICA - The so-called Costa Rican space agency, recently approved by Congress, does not have to be a bureaucratic giant, with a large office...

50 years ago the San Carlos River was crossed by ferry and these were the rates

TODAY COSTA RICA - Before the Office of the Comptroller General (CGR), the rate agreed by the Municipality of the canton of San Carlos...

Foreigners tried to leave Costa Rica with falsified covid-19 tests

QCOSTARICA - Four foreigners, including two minors, tried to leave Costa Rica using Covid-19 tests with negative results, which were determined to be falsified. The...

Panasonic will invest US$10 M to move operations from Asia to Costa Rica

QCOSTARICA - Panasonic announced that it will invest US$10 million dollars in the expansion of its plant in Costa Rica, in order to move...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.