Traveling to Costa Rica soon? You may have already heard about something called the IVA (pronounced ee-vah). If you have, you almost certainly have questions. Maybe a few concerns, even. What is Costa Rica’s new IVA tax and how will it affect your trip?
First, let’s start with the super basics: IVA is short for el Impuesto sobre el Valor Agregado, or value-added tax. If you live in or have traveled through Europe, you’re already familiar with this type of tax: in English, we often refer to it as a VAT tax, a goods and services tax, or a national sales tax. But, it’s new to Costa Rica: the IVA tax just went into effect on July 1, 2019.
Essentially, Costa Rica’s IVA adds a 13% tax to all goods and service that don’t already pay a 13% sales tax (aka the IVI – el impuesto de ventas incluido, or the included sales tax).
To put that into layman’s terms, things like your vacation rental or restaurant meal have long included a 13% IVI sales tax and will not incur an additional 13% IVA tax. But, travel goods and services – well, they are affected. Here’s how it works.