|Research by Country/Region
January 16, 2018
|COSTA RICA: CUSTOMS, TAXES and DOCUMENTATION REQUIREMENTS for IT PRODUCTS and SERVICES IMPORTS |
A. Is this country a member of the Information Technology Agreement?
B. Customs documentation requirements for IT products
C. Software: duties and taxes, updates, licenses, electronically delivered
D. IT services: tax treatment and other regulations
E. Refurbished, used, or repaired computer equipment imports
A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
YES. However, Costa Rica will not eliminate its tariffs fully on a few products until 2005. See its tariff schedule on the WTO site here.
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS
What are the documentation requirements for the physical import of software? For other information technology products?
Physical import of software, as well as other information technology, requires the following documentation at the port of entry: a commercial invoice, the original airway bill (or ocean bill of lading), customs declaration, and a product value declaration (these last two documents done by a Costa Rican customs broker).
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED
DUTIES AND TAXES ON PHYSICAL SOFTWARE IMPORTS
Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Duties are assessed on the commercial CIF (cost, insurance and freight) value of the software as stated on the accompanying invoice and shipping documents. Total import duties/taxes applied on software are 16.39 percent, based on the CIF commercial invoice value.
Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
Taxes are assessed on the commercial CIF (cost, insurance and freight) value of the software as stated on the accompanying invoice and shipping documents. Total import duties/taxes applied on software are 16.39 percent, based on the CIF commercial invoice value.
If software comes installed as part of imported computer equipment, it will be considered part of the total value of the computer package, as invoiced.
Is customized software treated differently than packaged software?
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IMPORTS OF SOFTWARE UPDATES
What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
Costa Rican customs does not differentiate between original software and updates. Taxes will be assessed on the commercial CIF value as shown on the accompanying invoice.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER
Are software licenses classified in Harmonized System 4907?
In Costa Rica, software licenses are classified under the Harmonized System code 4911 (under printing materials).
Are import duties/taxes applied? If so, on what cost/price base are they levied?
Total import duties/taxes applied are 29.95 percent, based on the CIF commercial invoice value.
Are withholding or other additional taxes applied on software licenses? If yes, how?
No withholding taxes are applied on software licenses.
If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
Affirmative, the agreement or EULA (end user license agreement) included in the packaging or as part of the installation/ registration of shrink wrapped software imported from the U.S. would be binding on consumers in Costa Rica. Copyright laws and international copyright treaties protect U.S. software imported into Costa Rica. As with other intellectual property laws and treaties, any copyright violation can be prosecuted under local law (ley de observancia in Costa Rica). It is important to note also that some restrictions may apply to software products that are bought in the U.S. for use outside of the U.S. (such as technical support or warranties).
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE
Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
According to Costa Rican customs authorities, although all "mercancias" (merchandise) imported into and/or distributed in the country are regulated by the Costa Rican General Customs Law, by the Central American Tax Regime, by the Intellectual Property Law, and by the Consumer Protection Law, there are no statutes that apply to digital distribution over the Internet. No import duties/taxes are charged on software delivered to the end-user over the Internet. There is no regulatory board nor is there any regulation in the Costa Rican customs law to charge import duties/taxes for a product (software) sent via the internet.
Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
The local manufacture and sale of CDs containing software imported by an authorized/licensed distributor, will be subject to paying consumption taxes, sales taxes, and income taxes. However, local law permits a local company which is legitimately importing and marketing a program to bring legal action against licensed manufacturers which have avoided import duties and taxes by importing the same product electronically and pressing CDs, for example, and then marketing the product. Thus, companies importing products electronically for local manufacture and distribution should seek legal counseling and thereby avoid being charged with an unfair competition suit under local law.
What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
Present tax laws in Costa Rica do not contemplate taxation on digital products electronically delivered over the Internet; therefore no documentation requirements exist.
Must an electronically delivered software import be accompanied by a physical shipment of the same product?
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS
Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
According to the "Direccion General de Tributacion Directa" (which is the Costa Rican government equivalent to the Internal Revenue Service office in the U.S.), services related to the sale of software are subject to consumption taxes, sales taxes, and income taxes. A foreign technician/company could be subject to a 15 percent withholding of his/her compensation to comply with tax payment requirements, according to Costa Rican immigration authorities.
Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
Are special visa, work permits, and/or professional certification by an accredited body required?
The local company needing this service must request from immigration authorities a temporary work permit, certifying the following: the job to be done; the need to bring someone into the country to do the job; and specifying if payment will be done in costa rica or outside of the country. The U.S. technician must bring with him a letter from his company explaining the job he/she will be performing in Costa Rica. This letter must be authenticated by a Costa Rican consul in the United States.
As a general practice, and as a suggestion from local firms, technicians that are coming to Costa Rica from the U.S. for one or two weeks only to set-up equipment/software, or to provide training during such a short period of time, come as tourists. U.S. citiziens traveling as tourists do not need a tourist visa to come into Costa Rica, and are allowed to stay up to three months in the country.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS
1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
The import of refurbished computer hardware, parts and accessories (including toner cartridges) is permitted in Costa Rica.
If so, what are the documentation requirements?
Refurbished equipment and parts require the following documentation at the port of entry: a commercial invoice, the original airway bill (or ocean bill of lading), customs declaration, and a product value declaration (these last two documents done by a Costa Rican customs broker).
Is special labeling required?
A product label is required. According to Costa Rican law 7472 and various government decrees, it is a requirement that labeling and instructions on how to use the product be in Spanish. This requirement is for products of any kind (including remanufactured parts) that are sold at retail. An alternative is to add a sticker with all the information in Spanish, including but not limited to: name of the product, description, country of origin, technical requirements, how to use it or install it, consumer cautions if any, company that manufactures (or remanufactures) the product, company that exports, company responsible for the importation into Costa Rica, expiration date if any, and any other information the exporter considers helpful to the consumer. Label must clearly state that the product is refurbished.
What value should be shown on the invoice?
The commercial invoice, as well as the customs declaration, must state that the product is refurbished/ remanufactured.
How are duties and taxes assessed?
The present customs law does not differentiate regarding the amount of duties/taxes if the goods are new or refurbished/remanufactured. Duties/taxes are assessed on the "customs value" (as it is called in Costa Rica) of the merchandise/product presented. The customs value of merchandise includes the CIF (cost, insurance and freight) value, plus any other value added and shown in the commercial invoice (e.g. value of software services included with the package).
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Same as for refurbished computer equipment. See answers above.
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3. REPAIRED COMPUTER EQUIPMENT
Are duties and taxes assessed on the re-import of repaired computer equipment?
Equipment may be sent out of the country to be repaired. Prior to shipping the equipment, paperwork must be prepared to identify the shipment as a "temporary export." This paperwork should also state to the Costa Rican customs authorities that equipment is being sent out of the country to be repaired. When the repaired equipment comes back into the country, a copy of the temporary export documents must be presented at customs along with import documents. Duties/ taxes are assessed on the "customs value" of the CIF value of the repair and service costs, as invoiced, of the merchandise/ product presented. The customs value of the merchandise should include the CIF (cost, insurance and freight) value, plus any other value added and shown in the commercial invoice (e.g., cost of repair services incorporated in the package).
How should the commercial invoice appear?
The invoice must indicate the CIF value of repairs (cost of parts and service cost).
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This response was prepared by the U.S. Department of Commerce/Commercial Service in San Jose, Costa Rica, in February 2003. For further clarification please contact
Senior Commercial Specialist
U.S. Embassy, San Jose:
Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.
This page was last updated on 06/18/2009. This site is operated by the Office of Technology and Electronic Commerce (OTEC) division of the International Trade Administration, U.S. Department of Commerce.