Tuesday 29 November 2022

Tourism group supports decition to collect VAT on home rental platforms

Costa Rican citizens must know and understand that one of the factors that has most influenced the great rise in rents that we all pay is the fact that many homeowners have taken advantage of the competitive advantage of not charging the 13% Value Added Tax

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29 November 2022 - At The Banks - BCCR

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QCOSTARICA –  The Tourism for Costa Rica group of entrepreneurs support the decision of the Ministry of Finance, in response to multiple efforts on its part and other tourism organizations, to force the technological platforms, such as Airbnb, Homeaway, Vrbo, and others, that serve to rent private houses and rooms in Costa Rica to charge the 13% Value Added Tax (VAT) – Impuesto al Valor Agregado (IVA) in Spanish.

Up to now, homeowners had taken advantage of the competitive advantage of not charging the 13% VAT

It is important for the general public to know that these taxes are paid by tourists and people who rent them and not by the owners or businesses who rent the houses and rooms, so there is no negative impact on them.

Read more: Airbnb and others must apply13% VAT starting November

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“Costa Rican citizens must know and understand that one of the factors that has most influenced the great rise in rents that we are all paying is the fact that many homeowners and businesses have taken advantage of the competitive advantage that has, until this date, the non-payment of taxes and patents, then they prefer to rent to tourists for short term and at higher rates than what they can get in the long term in the local market.

“We take the opportunity to make it clear that we have absolutely nothing against the technological platforms that are used in this, such as Airbnb, and that rather we see them as important allies in positioning and promoting our tourism product,” said Bary Roberts, president of the group of tourism entrepreneurs in Costa Rica.

“It is very important to highlight that the non-collection of these taxes means many millions of dollars less for Costa Rica in taxes to invest in infrastructure and other services, including the Caja Costarricense de Seguro Social (CCSS) and that the non-application of this VAT collection and the other items such as the corresponding quotas of the CCSS, up to this date, have negatively affected us all.

“One of the responsibilities of the State is to guarantee a level playing field so that all economic participants can carry out their activities under equal conditions established by the state and although it is true that we celebrate this decision of the Ministry of Finance, we also trust that the rest of the institutions, such as the municipalities, follow this line and apply what is stipulated in the law,” concluded Roberts.

We have a lot of work ahead of us in terms of reducing production costs, simplifying and eliminating procedures and other factors necessary to promote formality, but that should not be a justification for breaking the law.

Source: Revista Summa

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