Costa Rica to increase tax on construction services in September

Despite the plea from the Costa Rican construction chamber to delay increasing taxes on the industry, the finance ministry is set to move forward with a hike that will affect construction services. 

The general director for tax at the ministry, Rudolf Lucke, said on Wednesday that the increase from 8% to 13% will be applied to the value-added tax on engineering, architectural and topographical services, among others. The change will come into force on September 1. 

“In the bill [approved in 2018] it was established a period of time so that the 13% rate was gradual, therefore for some time the payable tax rate was 4%, then it was 8% and now we are reaching 13% which is the normal rate of value-added tax [for construction services],” he was quoted as saying by news outlet Monumental. 

The bill, aimed at strengthening public finances, was approved by congress in 2018 and implemented in 2019.

“Which are the affected services? Among them are the construction of commercial and residential buildings, civil engineering works, masonry works, painting, architecture and engineering consulting, topography, installation of glass and windows, among others,” said Felipe Bonilla, tax manager at Grant Thornton.

Photo: AFP