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July 15, 2022
Costa Rica’s Government publishes regulations to implement the Digital Nomads Law
On 8 July 2022, Costa Rica’s Government published, in the Official Gazette, Executive Decree No. 43619-H-MGP-TUR, “Regulations to Law No. 10.008, Law to attract remote workers and international service providers,” which implements the Digital Nomads Law (Law No. 10.008).
On 1 September 2021, the Government published, in the Official Gazette, Law No. 10.008, “Law to attract remote workers and international service providers” (so-called Digital Nomads Law).
The law establishes a framework for foreigners interested in working remotely from Costa Rica and promotes the reactivation of the economy after the COVID-19 pandemic.
For these purposes, the law grants tax benefits to taxpayers who meet certain conditions, including obtaining the specific migratory status for remote workers or service providers. The tax benefits include the following:
Such benefits are eliminated immediately after the General Directorate of Immigration cancels or revokes the remote worker’s or service provider’s beneficiary status.
The regulations implement the provisions of Law No. 10.008, which established rules for foreigners who are authorized to enter and stay in the country under the migratory category of nonresident, subcategory of stay worker or remote service provider.
The regulations set out the immigration procedure remote workers or service providers must follow, as well as the procedure for obtaining the tax benefits under Law 10.008.
In addition to provisions on the corporate income tax exemption, the regulations establish what remote workers or service providers may bring into Costa Rica under the import tax exemption. Specifically, the regulations allow remote workers or service providers to enter Costa Rica with the following equipment without being subject to import tax, provided the equipment is necessary for the performance of their duties:
The equipment may be considered a part of the remote worker’s or service provider’s luggage. If they bring equipment into Costa Rica that is not listed above, the equipment will not be considered a part of the remote worker’s or service provider’s luggage, and the remote worker or service provider must use the Tax Authority’s virtual system, Exonet, to request the import tax exemption.
The equipment must be kept in the remote worker’s or service provider’s possession for the period in which they hold their immigration status. Once the immigration status expires, the remote worker or service provider may transfer the equipment to third parties who do not qualify for the tax benefits after paying the corresponding taxes. Otherwise, if they keep their equipment, they will leave with it as part of their luggage.
The regulations also contain provisions related to the payment of taxes when a remote worker’s or service provider’s immigration status is cancelled or revoked.
The regulations entered into force as of their publication in the Official Gazette.
For additional information with respect to this Alert, please contact the following:
Ernst & Young, S.A., San José, Costa Rica
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young Abogados, Latin America Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific