As per the latest update to Costa Rica’s tax exoneration law for new residents, here is our newest guide for how to import a vehicle to Costa Rica tax-free. Hint: it is not easy or straightforward!
Purchasing a new vehicle in Costa Rica is considered expensive to expats because of the high taxes on vehicles in this country. This begs the question: does it make more sense to import a vehicle into Costa Rica? It turns out that importing a new or used vehicle will cost about the same – if not more – than buying a similar car in Costa Rica.
To combat these prohibitive import taxes, in 2021, Costa Rica passed a law that would allow for the tax-free importation of vehicles into the country by new residents of the country. The process of implementing this law into action took nearly two years and the regulations were finally released last week. This means that newly accepted residents of Costa Rica have the option of importing two vehicles per household
It is generally most economical to purchase a used vehicle in Costa Rica and the process to import a vehicle to Costa Rica is slow and bureaucratic. This updated guide will help explain the process of importing and legally registering vehicles in Costa Rica in 2023.
To read our article from last year about if you should import or buy a car in Costa Rica, click here.
The Newly Implemented Law
The approved Law for the Attraction of Investors, Renters and Retirees (2021) aims to grant additional benefits to the new residency applicants in these three categories: investors, renters, and retirees. The benefits will apply to those who apply for residency in the first 5 years of the validity of the law (so, as of 2023) and will last for 10 years after they get approved.
According to our lawyers at Invicta Legal, the benefits of this newly-implemented law are as follow:
- One time tax exemption from import of household goods. These include new and used household goods in reasonable quantities such as: appliances, furniture, decorative items, among others.
- Tax free import of 2 vehicles (land, maritime and air transport) for personal or family use.
- Local income tax for the amounts declared to obtain the migratory status does not apply. Further income resulting from the investment within the national territory will have to pay income tax.
- 20% transfer tax reduction of the property acquired during the period of said law.
- Tax exemption for equipment or materials for professional or scientific use.
- The beneficiaries of the immigration status of investors, residents and retirees will not be considered automatically as tax residents.
In addition, in the investor category application, there is a reduction of the investment sum from USD$200,000.00 to USD$150,000.00. This investment can be executed by acquiring assets, shares, securities, and projects of national interests. Moreover, those investors in venture capital or sustainable tourism infrastructure will also be considered within this category.
Those applying for residency in Costa Rica can import a maximum of two vehicles, for personal or family purposes, free of import tax, customs, and value-added taxes. If either of these vehicles is stolen or destroyed, the person may import another vehicle with the same exemptions.
These exemptions are valid for ten years and are set to expire in July of 2031.
How To Apply For Tax Exoneration
To apply for import duty exemptions on a vehicle or household goods, you must:
- Present your Costa Rica DIMEX card (showing resident status as retiree, renter, or investor)
- Deposit your vehicle at a customs warehouse
- Request the exemption from the Treasury Department (Ministerio de Hacienda) online through their website, EXONET
You will also need to present:
- A digital signature
- Certification you are up to date with Caja payment.
- Certification you do not owe any taxes, corporation, property taxes etc.
- Certification stating the shares you own in the corporation importing the vehicle and/or goods
- A sworn, notarized statement from every qualified member of your family (spouse and/or adult single children under 25 yrs old) that they will not request exoneration on their own.
- The bill of lading and copy of the vehicle’s title
- The customs value of car
The Challenges Of This New Law
These certifications take time to obtain and will cost several hundred dollars in lawyer fees.
Once all documents are uploaded to the EXONET website, the Treasury Department has sixty days to approve or deny the application. They take into consideration the economic income declared when applying for residency and will only approve exonerations on vehicles and goods that they consider within the means of your monthly income.
Once granted the exoneration, new residents are committed to have residency in Costa Rica for ten years from the time the exoneration is granted. If you decide to cancel your residency before the ten years, you have to pay the full amount of import duties that were exonerated plus interest. The same applies if immigration cancels your residency for any reason.
Only the beneficiary, spouse, or dependent family members (children under 25) are allowed to drive the car. Failing to follow these rules will result in the confiscation of the vehicle and you have to pay the duties plus interest.
You can not sell or transfer the car for ten years unless you pay the full duties that were exonerated.
To sell the car or transfer to someone else after ten years, you will have to pay 30% of the value of the car at time of import (no regular car value depreciation is calculated).
How To Import A Vehicle To Costa Rica
Importing vehicles to Costa Rica is supervised by the Customs office (Aduana). They will request to see documents that prove legal ownership of the vehicle you are applying to import. The vehicle’s title must also be clear of any liens or other items that may compromise importation, such as salvaged or scrapped vehicles.
The cost to ship a foreign car to Costa Rica includes:
- Freight charges (7% of the vehicle’s value)
- Freight insurance (1.5% of the market value + freight minimum)
- 45%-80% in import duties
Imported vehicle values in Costa Rica are determined by the Costa Rican government, which tends to assign a higher value than the Blue Book. Customs officials calculate a vehicle’s market value based on the vehicle’s age. Since used cars are more expensive in Costa Rica, this value is higher than the Blue Book value.
- Vehicles less than 3 years old have a duty rate of 52.28%
- 4-5 years old equates to 63%
- 6 plus years old is 79.02%.
Once in the country, your vehicle will be stored with Customs until the vehicle’s tax class is defined and naturalization fees are paid. This is accomplished with the help of a certified Customs broker and you will need to have all original documents for this (no photocopies). Once finished, the vehicle will be released from customs.
At this point, you will have 48 hours to complete the mandatory vehicle inspection with DEKRA, Costa Rica’s official annual vehicle inspection authority. Every vehicle circulating on Costa Rica’s roads must have a valid technical inspection from DEKRA once a year to ensure that it complies with basic safety standards (there are stations throughout the country and your annual due date is dependent on the last number of your license plate).
Next, you will need to pay the Marchamo tax on your newly imported car. This tax pays for the right to circulate and it is an annual tax that is paid at the end of every year. This tax is paid to INS (Costa Rica’s National Insurance Agency) and the amount depends on the age and type of car, with options to pay for more or less coverage. It can range from $100-$1000 a year.
To apply for your Costa Rica license plate, the vehicle must be registered with the National Registry (the agency in charge of all titled assets in Costa Rica. This process requires hiring a Notary Public who will draft the deed and file it with the Registry. This process will grant you the vehicle’s property title, the deed, license plates, and sticker plates.
Once all of these pieces are in place, you will need to return to DEKRA with all of the above documents and they will provide you with a vehicle inspection sticker to show that the vehicle is equipped to circulate in Costa Rica.