Costa Rica’s Department of Revenue Dirección General de Tributación (DGT) has introduced new regulations to track and tax individuals earning income through platforms like Airbnb. This initiative is based on Costa Rica’s commitment to the OECD Model Rules for Reporting by Platform Operators, aiming to ensure compliance with global tax standards and reduce under-the-radar income streams.
What the New Regulations Entail
Published on April 29, the resolution obligates digital platform operators like Airbnb and others to report detailed information about users who earn income via their platforms. Key data points include:
- User Identification: Full legal names and other identifying details of sellers.
- Payment Details: Amounts, dates, and the nature of the transactions.
- Property Listings: A comprehensive list of all rental properties, including houses, apartments, and parking spaces.
Platforms must share this information with the tax authorities of their home countries, who will, in turn, forward it to Costa Rica’s Ministry of Finance. For instance, Airbnb will report Costa Rican earnings to the Irish government (where Airbnb is headquartered), which will then relay the data to Costa Rican authorities.
Focus Areas for Tax Compliance
The regulation targets Property Rentals: Including houses, apartments, hotels, and other real estate.
The resolution emphasizes the importance of fiscal transparency and the duty of sellers to register as taxpayers, declare income, and pay applicable taxes, such as:
- Value-Added Tax (IVA)
- Income Tax
- Capital Gains Tax
Implementation Timeline
The DGT has established a clear timeline for compliance:
- 2025: Platforms must implement reporting procedures.
- April 30, 2026: First annual reports are due.
- Ongoing: Subsequent annual reports will also be due by April 30 each year.
Failure to comply with these regulations will result in hefty fines—up to 2% of the company’s gross income from the previous fiscal year, with penalties ranging from ₡1.39 million to ₡46.22 million.
Where taxpayers have to be careful is that the government can audit a few years back and get that information from Airbnb so if you are non-compliant at the moment it would be best to hire a CPA and ensure that you are compliant to avoid fines and penalties
Implications for Airbnb Hosts in Costa Rica
For Airbnb hosts and others in the short-term rental market, this resolution underscores the importance of compliance. Hosts must:
- Register with Tax Authorities: Declare their activity as a taxable business.
- Maintain Detailed Records: Keep track of all transactions and rental activities.
What Comes Next and Takeaways for Digital Platform Users
If you earn income through Airbnb or similar platforms in Costa Rica, now is the time to get your tax affairs in order. Non-compliance could lead to financial penalties and legal issues. Stay informed, register as a taxpayer, and ensure you meet your obligations to avoid complications when these new rules come into effect.
