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New regulations that went into effect as of February 7th 2001 will result in higher import duties for used cars. |
New taxes and laws !
The New regulations that went into effect as of February 7th 2001 will result in higher import duties for used cars. For the last few years the value for the vehicles was based on the “Black Book” (A used car market value guide from the USA) plus shipping cost. For established and registered used car dealers the value was the average wholesale price, and for non-commercial importers the average retail price published in this book.
Then a few months ago, the Costarican government signed the GATT treaty (An international commerce treaty) that establishes procedures for international trade. In this treaty it states that commercial invoices should be accepted as basis for values of the products exported and imported among the countries that signed this treaty.
Local used car importers !
Some local used car importers (probably all) saw this as the opportunity to declare a ridiculously low value on the cars they were importing and the Costarican Customs authorities did not have the mechanism to verify these values. Besides this, the local used car importers were not paying the full sales tax on the selling price of the car after imported. They just paid the sales tax on the declared import value and not on the sales value when they sold the car. This was costing the government millions of uncollected import duties and taxes.
So the government made a decree to change all this and tipped the scale in their favor, and much too far! Now in order to establish the value of the used vehicle you present the commercial invoice with the purchase value of the vehicle. In case you don’t have an invoice you have to declare the value. Customs will compare this value to the Black Book and (This is the catch) to their own Costarican Market value! This value is established by the government and the values they have for vehicles makes everyone who owns a car a millionaire.
Local used car importers !
© El Residente ARCR Administración S.A. San José, Costa Rica N.B. Like all information on the internet, this article may currently be incorrect or out of date.
These values are extremely high and are based on the selling price of used vehicles in Costa Rica, They will multiply this sales price times 0.502, 0.469 or 0.432 depending on the model year to establish the import value of the vehicle. They will accept your declared value as long as it is within 3 % of their established value. If not, they will apply their value. The duty percentages remain the same as they have been for the last 3 years, but they will calculate the sales tax based on the previously accepted value plus a 25% profit margin.
This is fair if you are a used car dealer because this way the government attunes the collection of the sales tax on the sale price, but not if you import the car for your own use.
As an example:
Let’s assume that you import a vehicle model year 1993 and with a black book value of $ 10.000 Let’s assume that the shipping cost from the USA is $600, so the total CIF value (Prices part of entry) is $10,600 Let's assume that the local market value times 0.502 is within 3% of the $10,600 (The local market prices have not been published or made public as of this date.) The duties to be paid before Feb 7th 2001 would have been: $10,600 x 59.33 % = $ $ 6,239.00
The duties to be paid after Feb 7th 2001: $10,600 all other duties based on this price and the 13% sales tax based on $ l3, 250 = $ 6,634.00
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