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Costa Rica Import Regs.: Information Technology

Questions and answers about prohibited imports, labeling requirements, customs valuation as well as tariffs & taxes of Costa Rica.

Costa Rica Import Regs.: Information Technology

Postby bridgat » Tue Nov 18, 2008 4:26 am

Hardware:

If a personal computer is purchased as a system, duties/taxes are assessed on the computer system, not on the individual components (cpu, keyboard, monitor, etc.).

Software/Services:

Duties/taxes are assessed on the commercial CIF (cost, insurance and freight) value of the software as stated on the accompanying invoice and shipping documents. If customized software is imported, customs will treat it the same way as it were packaged software. If software comes installed as part of imported computer equipment, it will be considered part of the total value of the computer package, as invoiced.

Costa Rican customs does not differentiate between original software and updates. taxes will be assessed on the commercial CIF value as shown on accompanying invoice.

Software licenses are classified under the harmonized system code 4911 (under printing materials). No withholding taxes are applied on software licenses.

Services related to the sale of software are subject to the consumption taxes, sales taxes, and income taxes. A foreign technician/company could be subject to a 15 percent withholding of his/her compensation to comply with local tax laws. Information technology solution providers are permitted to send personnel into Costa Rica to set-up hardware/software related to systems. The local company needing this service must request from the immigration authorities a temporary work permit, certifying the following:

the job to be done,

the need to bring someone into the country to do the job,

whether payment will be made in Costa Rica or outside of the country, and

the technician must bring with him a letter from his company explaining the job he/she will be performing in Costa Rica.

The above letter must be authenticated by a Costa Rican Consul.

Internet:

Although, all merchandise imported into and/or distributed in the country are regulated by the Costa Rican general customs law, by the Central American tax regime, by the intellectual property law, and by the local consumer protection law, there are no statutes that apply to digital distribution over the internet. No import duties/taxes are charged on software delivered to the end-user over the internet.

There is no regulation in the Costa Rican customs law to charge import duties/taxes for a product (software) sent via the internet. However, the local manufacturing and selling of CDs with software imported by an authorized/licensed distributor, will be subject to pay consumption taxes, sales taxes, and income taxes. Costa Rican law permits a local company which is legitimately importing and marketing a program to bring legal action against licensed manufacturers which have avoided import taxes by importing the same product electronically and pressing CD's, for example, and then marketing the product. Thus companies importing products electronically for local manufacture and distribution should consult legal counsel to avoid problems of unfair competition under local law. If the intellectual property value is declared with the imported software, import duties/taxes will be applied on the total cost of the medium and the intellectual property cost.

Customs Procedures:

Tangible import of software, as well as other information technology, require the following documentation at the port of entry:

A commercial invoice,

Original airway bill (or ocean bill of lading),

Customs declaration, and

A product value declaration (these last two documents done by a Costa Rican customs broker).

Currently, Costa Rican tax laws do not cover transactions conducted purely over the internet.

Imports of Re-manufactured Equipment:

Importation of remanufactured parts for photocopiers, fax machines, laser printers, and toner cartridges is permitted by Costa Rican authorities.

In accordance with Costa Rican Law 7472 and various government Decrees, it is a requirement that labeling and instructions on how to use the product be in Spanish. This requirement is for products of any kind (including remanufactured parts) that are sold at retail. Another alternative is to add a sticker with all the information in Spanish, including but not limited to:

Name of the product,
Description of the product,
Country of origin,
Technical requirements,
How to use and/or install the product,
Consumer precautionary procedures,
Name of manufacturing (or re-manufacturing) company of the product,
Name of exporting company,
Name of importing company,
Warrant period and/or expiration date associated with useable life of the product, and
Any other information the exporter considers helpful to the consumer.

Product label, the customs declaration, and the commercial invoice, respectively, must clearly state that the product is remanufactured. Currently, customs law does not differentiate between used/remanufactured and new equipment or products for duties/taxation purposes. The duties/taxes are assessed on the CIF value of the merchandise/product.
bridgat
 
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