How electronic invoicing works in Costa Rica

The implementation of electronic invoicing in Costa Rica was initiated in 2017 by the General Directorate of Taxation - DGT of Costa Rica through a gradual program of adoption by sectors and activities of taxpayers that ended in 2018. Since then, electronic invoicing is mandatory for all taxpayers both in issuance and reception. 

New Resolution on Technical Provisions for Electronic Vouchers: Version 4.4

The Ministry of Finance of Costa Rica has published a new General Resolution establishing the technical provisions for electronic vouchers used for tax purposes. This regulation introduces version 4.4 of the Annexes and Structures of the electronic invoice, granting taxpayers a six-month period, starting on December 1, 2024, to implement and adopt all the specified changes.

Taxpayers will be able to start using version 4.4 from April 1, 2025, but its use will become mandatory for everyone from June 1, 2025. From that date onwards, only version 4.4 will be in effect.

Requirements for the Commercialization of Medicines
A notable element of the Resolution is Transitory II, which outlines specific requirements for taxpayers engaged in the commercialization of medicines for human consumption.
Before version 4.4 takes effect, such taxpayers must update their systems to version 4.3 to incorporate the mandatory fields “Drug Registration” and “Pharmaceutical Form.” These changes will become enforceable on January 1, 2025, ensuring that the required information complies with the Ministry of Health’s current sanitary registration standards.

Additionally, the "Regulation of Electronic Receipts for Tax Purposes" has been published in the Official Gazette, providing the legal basis for this Resolution and introducing a new electronic receipt for payments.

This new receipt is designed to document transactions involving partial payments for goods and services sold on credit, with deferred payment or other specific conditions set by the Ministry of Finance. It is important to note that issuing this receipt does not eliminate the obligation to generate the corresponding invoice at the time of the sale or service delivery, thereby ensuring proper documentation of all stages of the commercial transaction.

How the electronic invoicing system in Costa Rica works

In the case of Costa Rica, electronic invoicing is carried out through the Ministry of Finance, which receives, validates, and issues a receipt of the invoice to the final recipient. Electronic invoices are called electronic documents. 

All electronic documents and associated documents must have the acceptance message from the Ministry of Finance; otherwise, they cannot be used as a means of supporting tax credits or as deductible expenses. 

The flow works as follows:

• The taxpayer sends an XML to the Ministry of Finance of an invoice for validation and receipt of the Hacienda Message.
• The Ministry of Finance receives the invoice and has up to 3 hours to validate and send a receipt of acceptance or rejection. This message will accompany the invoice sent to the recipient.
• The recipient must accept or reject the invoice with a new message. 

In the electronic invoicing flow of Costa Rica, there are two key messages that will travel along with the electronic documents.

• Hacienda Message: A message that the Ministry of Finance gives in response to the electronic invoice issuer indicating the Approval or Rejection of it. The validations by the Ministry of Finance will be at the structural level in addition to semantic validations (amounts, addresses, etc.).
   
• Recipient Message: A message that the recipient of the electronic invoice sends to the Ministry of Finance accepting, partially accepting, or rejecting it.

Confirmation or rejection by the receivers "must be sent to the General Directorate of Taxation for respective validation within the first 8 business days of the following month to the transaction or respective operation. In case of rejection, a new confirmation message must be sent," as determined by resolution DGT-R-063-2018.

All electronic receipts and associated documents must have a message of acceptance from the Ministry of Finance; otherwise, they cannot be used as support for tax credits or deductible expenses.

Requirements to be an electronic invoicing provider in Costa Rica

To be able to issue electronic receipts, the taxpayer must register with the DGT and have a security mechanism to sign the electronic receipts and ensure their integrity and authenticity. For this, it is necessary:

• Electronic signature to guarantee integrity and authenticity. The invoice must be digitally signed from a certificate issued by an international certification authority.
• Storage is mandatory for the issuer and recipient for a period of five years.

Electronic Receipts

Electronic receipts are those tax documents that are generated, expressed, and transmitted at the time of selling goods or services.

Types of Electronic Receipts

The electronic invoice in Costa Rica comprises a total of five documents or messages that are part of the exchange:

• Invoice: Supports the sale of goods and the provision of services.
   
• General electronic invoice: an electronic receipt that details sales in a global invoice whose sender is a generic tax ID that serves to declare the corresponding income before the Ministry of Finance in case the taxpayer does not request their electronic invoice.
   
• Export electronic invoice: an electronic receipt that serves to detail the export of goods and services "abroad."
   
• Purchase electronic invoice: An issued electronic document that certifies the purchase of goods or services from taxpayers excluded from the use of electronic receipts. This document must be issued by the buyers of those services or goods to the Ministry of Finance for validation.
   
• Credit note and Debit note: Allow for the annulment or modification of the accounting effects of the electronic invoice or ticket without altering the information of the original document.
   
• Electronic ticket: an electronic receipt that supports the sale of goods and services, authorized only for operations with final consumers.
   
• Acknowledgments of acceptance or rejection of documents.

Format of Electronic Invoices: 

Electronic invoices must be issued in XML format. The electronic invoice is version 4.3.

Electronic Invoicing of Airline Tickets

For Travel Agencies and Airlines accredited by IATA and BSP, the General Directorate of Taxation establishes conditions in the process of the sale of air tickets by companies and agencies, according to the following scheme:

• In the case of direct sales made by airlines to final consumers, electronic tickets must be issued within a maximum period of 48 hours, making them available to passengers on their websites or electronic platforms. The purpose of this measure is to facilitate the obtaining of electronic invoices for the purchase of these tickets at the request of the users.
• For sales made by travel agencies on behalf of airlines, a single weekly electronic invoice must be issued by the airline to each travel agency. This invoice will detail the number of airline tickets sold by the agency and will be accompanied by the BSP's supporting billing report, which must be included as an attachment to the electronic invoice.

Agencies shall issue an electronic invoice to the final consumer at the time of sale of the airline tickets. This invoice shall explicitly indicate the number of each ticket sold and all the information required in accordance with the Electronic Voucher Regulations and the General Resolution on the Technical Provisions of Electronic Vouchers.

Independent travel agencies who are not accredited by IATA, will act according to the scheme defined for the direct sale of tickets by the companies to the final consumer. They must release the electronic tickets associated with the tickets within a maximum period of 48 hours so that the final customers can "self-issue" an electronic invoice when required.

Catalog of Goods and Services (CAByS): 

The Ministry of Finance and the Central Bank of Costa Rica have established a standard procedure for the classification of products and services that are marketed nationally through the creation of the Catalog of Goods and Services CAByS.

The CAByS catalog groups goods and services into hierarchical categories and assigns to each of these products the Value Added Tax (VAT) rate that corresponds according to current legislation. In this way, taxpayers must include in the electronic invoices, in the field called "Product/Service Code", the identification code for each good or service assigned in the Catalog of Goods and Services CAByS.

Automate the Issuance and Receipt of Electronic Invoices with any trading partner. 

At EDICOM, we have an electronic invoicing platform adapted to the technical and legal specifications of Costa Rica.

On one hand, through integration with their management system, EDICOM can automate the generation and sending of invoices to the Ministry of Finance, also integrating the receipts received in the ERP. At the same time, the sending of invoices to recipients is also automated.
For electronic receivers who are not issuers, the Supplier Portal solution developed by EDICOM allows managing the receipt of invoices and managing the Receiving Message both to the issuer and to the Ministry of Finance.

Additionally, through the Supplier Portal, any type of documentation from electronic issuers can be received, such as the sending and receipt of purchase orders. This portal is intended for those electronic invoice receivers who do not have an integrated EDI solution.
EDICOM is a specialized technology provider in the implementation of international EDI projects. Regarding electronic invoicing, EDICOM has developed a Global e-Invoicing Platform, adapted to the technical and legal specifications of each country, and integrated into the company's management system, automating the issuance and receipt of documents, allowing for centralized management. The platform also verifies that each invoice meets the necessary requirements before sending or integrating it into the internal management system.

The Global e-Invoicing Platform simplifies the issuance and receipt processes of electronic invoices in multinational environments. It is the solution for those companies that operate in different markets from centralized management systems and that must be able to process these documents in accordance with the current legislation in each country.

Benefits of electronic invoicing in Costa Rica

In the case of Costa Rica, as in all Latin American countries, the adoption of electronic invoicing and the progressive implementation of other tax obligations through electronic means respond to the need to tackle tax fraud and improve tax control and collection processes, simplify procedures, and automate supervision processes.

The implementation of electronic invoicing brings significant benefits to both public and private entities in the following areas:

1. Direct cost savings through the elimination of paper, printing, invoice delivery, and storage.
2. Increased productivity of the administration department, which, thanks to the automation of this process, has more time to perform other tasks.
3. Automation and integration in the invoice reception processes. The electronic origin of the document allows automatic integration into the system and therefore its accounting, leaving the invoices ready for payment with minimal human intervention.
4. Greater efficiency and elimination of human errors because of automation and fully integrated treatment. Electronic invoices can be generated and transmitted automatically. In Costa Rica's model, the communication flow of the electronic invoice includes two key messages: Treasury message, Receiver message.

Therefore, most of the economic benefits are not due to savings on printed material and shipping costs, but rather to the total automation and integration of the process between the parties involved.

1. Shorter delivery and invoice collection times. The efficiency of the emission and reception processes, their immediacy, and the almost complete elimination of errors in the generation and accounting of invoices contribute to reducing the payment terms of invoices.
2. Increased security. Digital signature systems guarantee the integrity, origin, and authenticity of these invoices.
3. Agile, secure, and legal storage. The original and signed documents are stored for at least the time established by current legislation. This reduces storage costs and also facilitates the consultation of old invoices.
4. Elimination of the risk of loss of physical documents thanks to secure storage and digital consultation of invoices.

In conclusion, the implementation of electronic invoicing as a billing model brings numerous advantages to companies, which ultimately result in cost savings. Therefore, the investment in technology required to incorporate this system is very profitable.

In addition to its profitability, the adoption of electronic invoicing opens, in many cases, the door to the electronic data exchange system, EDI (Electronic Data Interchange). Companies not only assume a new billing management model but also take advantage of the digital leap to implement new communication solutions that will provide them with greater competitive advantages.