Tax authorities scouring Internet, social networks for vacation rentals

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August 13th, 2014 (InsideCostaRica.com) Costa Rican tax authorities said in recent days that they have begun scouring the Internet and social networking sites such as Facebook for those advertising vacation rentals in the country to ensure the owners of such properties are paying the mandatory General Sales Tax (IVI) of 13%.

 

Numerous sites exist online where property owners advertise their properties as vacation rentals.  One of the most popular sites, VRBO.com, lists over 1,200 vacation rentals in Costa Rica.

 

Property owners also routinely advertise their vacation rentals on social networking sites such as Facebook and free classified sites like Craigslist.

 

The Director General of Taxation, Carlos Vargas, warned property owners earlier this month that tougher enforcement of the sales tax was coming soon.

 

“The idea is to prevent tax evasion and unfair competition by the proliferation of vacation rental properties that pay no taxes, against formal hotels and lodges that do pay taxes,” Vargas said.

 

“If we do not fight informality in this sector, the Treasury will continue to lose resources as the [informal accommodations] absorb the tourism market.”

 

Vargas said that vacation rental owners – most of which do not charge for or pay the sales tax – unfairly compete against hotels, which must pay sales taxes and social security contributions.

 

The Ministry of Finance said it is planning several new tactics to enforce compliance and detect evasion of the tax.

 

Tax authorities also shuttered ten businesses in a single week earlier this month for failing to pay the sales tax.

 

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  • Indigodream

    Here we go again. It never seizes to amaze me how this government continues to shoot itself in the foot. The only real money coming to Costa Rica is in the form foreign investment and they have already lost over 50% in the past year. So why not put the final nail in the coffin by harassing the tourist industry, Costa Rica’s number one source of income. Almost every government in the world is raising taxes instead of cutting expenses. Costa Ricans generally don’t like or trust the government, yet they are so quick to take the handouts. So sad this is. For Costa Rica has the natural resources for sustainable living for all our people. Maybe our new president could lead us into prosperity from within. But then again, he may be just another puppet.

    • Jefe

      I reality, the majority of high priced vacation rentals are booked by Ticos and Tico business events. I say, “Let them pay their fair share”, as those Ticos are the same ones who evade taxes in their business ventures. Just how many of those luxury properties are owned by foreigners?

  • Upset with goverment of CR

    This is so stupied. Why not just kill what is left to be killed in Costa Rica. I know many Costa Ricans that are selling there homes to leave the country. My freind loves Costa Rica but now it to dam expensive for him to come to much taxes.