We introduce the CP violating scalar leptoquark $S_3$ to explain the measured values of the lepton universality ratios $R_{K^{(*)}}$. We derive constraints on the CP-even and CP-odd components of the leptoquark Yukawa couplings stemming from effects in $b to s mu mu$ and $B_s$ mixing. For the $b to s mu mu$ processes we impose $R_{K^{(*)}}$, $mathcal{B}(B_s to mu^+ mu^-)$, as well as CP-sensitive angular asymmetries $A_{7,8,9}$, whereas in the $B_s$ mixing sector $Delta M_s$ and $S_{psiphi}$ are considered. Combining the constraints within the $S_3$ model reveals that a large CP phase with a definite sign is perfectly viable for a leptoquark of mass below a few TeV. For larger mass of the $S_3$ leptoquark the CP phase is suppressed due to the observables pertaining to the $B_s$ system. We provide predictions of direct and mixing-induced CP asymmetries in $B to K mu mu$ that could reveal the presence of the novel CP phase.