Costa Rica’s Move to Mandatory E-Invoicing: What You Need to Know

Francisco de la Colina
April 12, 2018

Costa Rica is currently in the process of transitioning to mandatory e-invoicing by 2019. The use of e-invoicing will help the Costa Rican government strive toward its goal of digital inclusion, but also help combat tax evasion by optimising tax controls. Its strategy will place it alongside other Latin American countries, including Mexico, Brazil, and Chile who have significantly benefited from similar strategies.

How does the Costa Rica e-invoicing strategy compare to other countries in the region?

Costa Rica, like Chile, Peru, and Colombia, is introducing clearance e-invoicing framework where suppliers have to clear the invoice with the tax authority but do not need to wait for the authorization to communicate the invoice to the buyer. However, the invoice’s authorization message, returned by the DGT (the Costa Rican Tax Authority), is essential to ensure the invoice’s validity as a legally recognized tax document. To this end, electronic invoices must be sequentially numbered, issued in an XML format, digitally signed and generated by an issuance system that fulfills the necessary security requirements.

This system differs from Brazil, Mexico, and Argentina which operate a clearance e-invoicing framework where an invoice cannot be communicated to the buyer without the authorization message from the relevant tax authority.

What are the e-invoicing requirements in Costa Rica

Under the new rules in Costa Rica, taxpayers are obliged to implement an issuance system for all ‘comprobantes electrónicos’ (which translates to electronic vouchers or credit and debit notes, e-invoices and e-tickets). Among other things, the system used to issue these documents must:

  1. Fulfill strict security requirements
  2. Be capable of providing the required baseline functionalities for both inbound and outbound e-invoicing
  3. Be accessible, with reasonable prior notice, by the DGT to ensure they can verify processed documents

No certification of the issuance system, by the DGT or any other accreditation body, is required. Indeed, it’s important to point out that the issuance system targeted by the legislation isn’t necessarily a unique platform or software component. On the contrary, it may be interpreted in a wider sense as the combined operation of different systems, where each component fulfils a function as part of the whole issuance system (this includes enterprise resource planning (ERP), document exchange and reception, signing capabilities).

In addition, the law mandates that the invoice must be communicated to the DGT for clearance immediately after it has been generated. The tax authority will issue a reception message and validate or reject it within 3 hours. Invoices that do not contain the acceptance message as a proof of clearance will not be considered valid legal documents and cannot be used to reclaim tax for credit fiscal purposes. Accordingly, taxpayers must store the acceptance message received from DGT, for both their outbound and inbound invoices. If an invoice is rejected by the tax authority, the supplier must issue a credit note canceling the invoice and issue a new invoice that references the canceled document and the reasons why it was rejected.

Acceptance and rejection of an e-invoice

Once a buyer has received an e-invoice they must issue an acceptance or rejection message in the regulated XML format. This acceptance or rejection must be sent to the tax authority within 8 days from the issuance date of the invoice. The DGT then issues a message accepting or rejecting the buyer’s response.

“Such interaction with the tax authority and their method of reporting buyer’s acceptance or rejections of invoices is comparable to the situation in Chile. However, the difference in Costa Rica is that the DGT must authorize the buyer response once it has been validated.”

This differs from Chile where the tax authority only issues a ‘received’ message. As a consequence, it is important to note that while it is true that other countries have frameworks in which the buyer interacts with the tax authority with regard to the invoice (Chile as mentioned above or Brazil with the Manifestação do Destinatário). No other country in the world except for Costa Rica has a clearance model for buyer responses. This could potentially be copied in other countries as a method that provides more guarantees, certainty, and stability to the life of the invoice as a credit document (known as e-factoring). Factoring allows suppliers to meet their working capital needs by selling their invoices, or accounts receivable, to lenders for cash. The growth of e-factoring within Costa Rica will enable the further expansion of such a market in the Latin America region.

Archiving e-invoices in Costa Rica

Under the rules, comprobantes electrónicos or e-invoices, have to be archived for 5 years in the same format they were issued. Taxpayers must guarantee the integrity, authenticity, privacy, legibility, confidentiality, preservation and availability of the XML files during the entire archiving process. In addition, storage facilities must have the appropriate controls, audits and fail-safes in place to avoid data loss or data breaches.

Finally, taxpayers engaged in e-invoicing will need to keep purchase and sales information ledgers in electronic form. Such information consists of all the invoice data gathered per document plus summary information of all documents generated once a month in XML format.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Francisco de la Colina

Francisco de la Colina is a lawyer working on the regulatory team at Sovos TrustWeaver.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

Tax Information Reporting
April 15, 2021
Managing Form 1099-NEC Reporting After Publication 1220

Form 1099-NEC changes in 2020 Since the IRS released Publication 1220, announcing that Form 1099-NEC—for nonemployee compensation—would not be included in the Combined Federal/State Filing (CF/SF) program starting tax year 2020, 37 states have implemented direct state reporting requirements for new Form 1099-NEC.  Though there are 32 states that participate in the CF/SF program, the […]

North America Unclaimed Property
April 15, 2021
Delaware Unclaimed Property VDA Notices

Delaware VDA Responses Due Monday, April 19, 2021 If you received one of the recent unclaimed property DE VDA invitations sent February 19, 2021 your response is due Monday, April 19, 2021. Holders that received an invitation and do not respond by April 19th will be referred to State Escheator for audit examination. Double check […]

North America Unclaimed Property
April 14, 2021
When Are Unclaimed Property Reports Due and Other FAQs

When are unclaimed property reports due? This is a fairly common question asked by holders that are new to the escheat reporting process, or not as well versed in the intricacies of escheatment reporting. Fortunately, Sovos has provided answers to some of the most frequently asked escheat reporting questions to help your organization survive unclaimed […]

North America Unclaimed Property
April 14, 2021
Unclaimed Property Landscape for the Life Insurance Industry

Most unclaimed property professionals are familiar with the story of Verus Analytics, LLC’s (“Verus”)[1] appearance on the contract audit “field of play” some ten years ago, as it cut a swath across the life insurance industry with audits focused on the industry’s failure to report and remit unclaimed life insurance proceeds based on the insurers […]

Brazil E-Invoicing Compliance Tax Compliance
April 13, 2021
E-invoice Data Reveals the Impact of COVID-19 on Brazil’s Economy

Increased visibility into, and control over, taxpayer financial and trade data is the key benefit highlighted by governments that have introduced continuous transaction controls (CTC) regimes. Its importance cannot be overstated. Transactional data cleared by or exchanged through a tax administration authorised platform becomes the new source of truth for tax authorities to assess the […]