The Value Added Tax (VAT) in the construction sector of Costa Rica has undergone several significant changes in recent years. Initially, the sector was exempt from VAT, but starting from September 16, 2020, a gradual reform began to be implemented.

Until August 31, 2021, all construction projects registered and approved by the Federated College of Engineers and Architects of Costa Rica (CFIA) were exempt from VAT. From that date, a staggered tax rate was implemented: from September 1, 2021, to August 31, 2022, the rate was 4%, and from September 1, 2022, to August 31, 2023, the rate increased to 8%. As of September 1, 2023, the sector returned to the general rate of 13%.

This reform aims to support stability and growth in a sector vital to Costa Rica’s economy, both in terms of employment and production. Additionally, services related to construction, such as engineering, architecture, and surveying, are also subject to this tax regime.

It is crucial for companies and professionals in the construction sector to stay informed about these regulations and plan their projects accordingly to meet tax obligations and take advantage of available exemptions when applicable. For specific and up-to-date details, it is advisable to consult with tax advisors and the official publications from the Ministry of Finance.