The 2012 worldwide VAT, GST and sales tax guide

136 C OSTA RICA
Coffins
Domestic monthly consumption of electricity not exceeding 250
kw/h
Tires for farm machinery
Medicines
Books, musical compositions and paintings created in Costa Rica
Exported goods
Reimportation of national goods within three years of their export
E. Time of supply
The time when the taxable event is considered to have taken place
and VAT becomes due is called the “tax point.”
Goods. The time of supply for the sale of goods is the earlier of
the delivery of the goods or the issuance of an invoice.
Services. The time of supply for services is the earlier of when
the services are performed or an invoice is issued.
Imported goods. The time of supply for imported goods is when
the bill of lading or the customs form for the goods is accepted.
F. Recovery of VAT by taxable persons
A taxpayer may offset input tax, which is VAT paid on the purchase
of goods and services used to generate other goods and services
subject to tax. Input tax is generally credited against output tax,
which is VAT charged or collected on the sale of goods or the
rendering of services. An input tax credit may be taken in the
month of the import or the acquisition of goods and services.
Taxpayers receive a tax credit or deduction for tax paid with
respect to the following:
• The purchase or importation of goods and services that are
physically incorporated into or that are used directly in the
production of taxable merchandise or services
• The payment of insurance premiums for the protection of merchandise
used or incorporated physically in the production of
taxable merchandise or services
• The purchase of merchandise incorporated physically during
the production of exempt merchandise
• The purchase of merchandise incorporated physically during
the production of goods for exportation
A valid tax invoice or customs document must generally accompany
a claim for an input tax credit.
Nondeductible input tax. Input tax may not be recovered on purchases
of goods and services that are not physically or directly
incorporated into, or used in the production of, the final goods
and services supplied by the taxpayer. In general, input tax is not
deductible for overhead expenses of a business.
Refunds. If the amount of input VAT recoverable in a month
exceeds the amount of output VAT payable, the taxpayer obtains
an input VAT credit. The input VAT credit may be carried forward
to offset output tax in the following months. Under special circumstances,
if the taxpayer foresees that VAT credits will not be
used within the following three months, the taxpayer may request
to use the credits to offset other tax liabilities.