Understanding Costa Rica VAT Nexus Rules

In Costa Rica, the concept of "nexus" determines when a business is obligated to register for VAT. Unlike some countries that use revenue thresholds to trigger registration, Costa Rica requires registration from the very first taxable supply with no minimum threshold.

Who Must Register

Resident Businesses (Standard VAT Registration)

Any person or entity supplying goods or services in Costa Rica must register for VAT before making their first taxable supply. This includes businesses that:

• Deliver goods within Costa Rica

• Import or export goods

• Provide services locally

Registration is mandatory immediately upon beginning taxable activity. There is no waiting period or threshold to cross.

Non-Resident Remote Sellers (Simplified Registration)

Foreign businesses that sell digital or electronic services to non-VAT-registered Costa Rican customers must also register from their first taxable supply. There is no revenue threshold, so even a single sale to a Costa Rican consumer creates a registration obligation.

Reverse Charge and B2B Supplies

When a buyer provides a valid Costa Rican VAT ID, the transaction is treated as B2B. In certain cross-border scenarios, the buyer may be required to self-assess VAT through the reverse charge mechanism. See the Reverse Charge section in Article 3 for more detail.

Key Takeaway

There is no grace period in Costa Rica. If you are making taxable supplies, you should be registered. Kintsugi helps you identify this obligation early so you can act before your first sale.

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