In a significant development, the Costa Rican Legislative Assembly has approved a reform in the calculation method of the Marchamo, resulting in reduced charges for vehicle owners across the country. The Marchamo, colloquially known as the “circulation tax,” is an annual levy paid during the months of December and January and is related to the fiscal and commercial value of each vehicle.
The Reform: A Depreciation Table
According to this reform, a depreciation table established by Congress has been introduced, which specifies a lifespan of 15 years for motor vehicles and 10 years for motorcycles, based on the vehicle’s age compared to its year of manufacture. The minimum amount will no longer be a fixed figure of ¢23,110 colones for vehicles and ¢3,000 colones for motorcycles. Instead, it will be calculated based on the base salary outlined in Law 7337.
For the year 2024, this base salary is ¢462,200 colones.
The minimum tax for vehicles, aircraft, and sport fishing boats will be 5% of this base salary, currently equivalent to ¢23,110 colones, and will be applied on the first ¢220,000 colones of taxable base.
In the case of motorcycles with a value of up to ¢1.75 million colones, a tax of 0.65% of this base salary, equivalent to ¢3,004 colones, will be applied.
This reform aims to alleviate the tax burden for owners of vehicles and motorcycles in Costa Rica.
Different brackets will be applied, which will now be as follows for motor vehicles, aircraft, and vessels:
Up to ¢220,000 of taxable base: An amount equivalent to 5% of the base salary of Law No. 7337 (¢23,110 colones as of the year 2023).
On the excess of ¢220,000 and up to ¢3,000,000 of taxable base shall pay 0.60%.
In excess of ¢3,000,000 and up to ¢4,000,000 the taxpayer shall pay 1.80%.
In excess of ¢4,000,000 and up to ¢5,000,000 shall pay 2.10%.
Over ¢5,000,000 and up to ¢6,000,000 in excess of ¢5,000,000 and up to ¢6,000,000 shall pay 2.50%.
In excess of ¢6,000,000 and up to ¢10,000,000 shall pay 2.80%.
In excess of ¢10,000,000 and up to ¢13,000,000 shall pay 3.15%.
Over the excess of ¢13,000,000 shall pay 3.50%.
For motorcycles, the brackets will be:
Up to ¢1,750,000: An amount equivalent to 0.65% of the base salary of Law No. 7337 (¢3,004 colones as of the year 2023).
Over the excess of ¢1,750,000 and up to ¢2,200,000 shall pay 0.25%.
In excess of ¢2,200,000 and up to ¢4,000,000 shall pay 0.50%.
In excess of ¢4,000,000 and up to ¢7,000,000 shall pay 0.75%.
In excess of ¢7,000,000 and up to ¢10,000,000 shall pay 1.00%.
In excess of ¢10,000,000 shall pay 1.25%.
Reduction in Pollutant Emissions
The values obtained will be subject to a reduction in pollutant emissions and weight for vehicles up to 9 years old. The reduction varies from 3.84% for vehicles up to one year old to 1% for vehicles up to 9 years old. Vehicles older than 9 years will not receive a reduction.
For vehicle owners in Costa Rica, it is advisable to obtain information on the exact amount they need to pay for their Marchamo. This can be conveniently done by visiting the local office of the Instituto Nacional de Seguros (INS) or the online platform: Consulta Marchamo.
For further assistance, Blue Zone Legal is always available. We can help determine the precise amount to be paid and any other questions related to this reform.
Fair and Balanced Tax Structure
The recent changes in the methodology of the Marchamo tax collection are a positive development that benefits all road users in Costa Rica. The adjustments in the tax calculation method ensure that the charges are reasonable and in alignment with the assessed value of each vehicle. This shift aims to provide a fair and balanced tax structure, relieving the financial burden on vehicle and motorcycle owners throughout the country. As a result, this tax reform contributes to a more equitable and efficient system for all stakeholders.
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