Costa Rica tax system: audit, reporting and optimization of taxation of Сosta Rican companies and individuals: VAT, income tax and capital gains

Basic taxes (briefly)

Personal tax 0-25%
Corporate tax (in detail) Income tax is levied at the rate of 30%. However, for companies with gross income up to CRC 109.337.000, a progressive taxation scale is established from 5% to 20%.
Capital gains tax. Details Tax on gains from the sale of assets is levied at the rate of 15%.
VAT. Details The standard VAT rate is 13%. Reduced rates of 4%, 2% and 1% apply to some goods and services.
Other taxes Social contributions, Property taxes, Real estate tax
Government fee
Stamp duty 5 CRC for every thousand of the contract value in relation to various transactions

International tax agreement

Germany, Mexico, Spain
   
Argentina, Australia, Canada, Denmark, Ecuador, El Salvador, Faroe Islands, Finland, France, Greenland, Guatemala, Guernsey, Holland, Honduras, Iceland, Mexico, Nicaragua, Norway, South Africa, South Korea, Spain, and Sweden.


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Personal Taxes

Personal income tax is payable on income from the activities performed in Costa Rica and from Costa Rican sources.

The tax scale is progressive. For employment income, the rates are:

  • Income below CRC (Costa Rican colon) 863,000 – 0%;
  • from CRC 863,000 to 1,267,000 – 10%;
  • from CRC 1,267,000 to 2,233,000 – 15%;
  • from CRC 2,233,000 to 4.445,000 – 20%;
  • over CRC 4,445,000 – 25%.

There is a different tax scale for the income of self-employed individuals.

Gains from the sale of assets, interest and rental income are generally taxed at the rate of 15%.

Corporate Income Tax

The territorial principle of taxation applies: tax is charged on profits generated in Costa Rica and from sources in Costa Rica.

Corporate income tax rate is 30%.

However, companies with gross income of up to CRC 112.170.000 are taxed at the following progressive rates:

  • Gross income up to CRC 5,286,000 – 5%;
  • from CRC 5,286,000 to 7,930,000 – 10%;
  • from CRC 7,930,000 to 10,573,000 – 15%;
  • over CRC 10,573,000 – 20%.

There are also corporate income taxes levied by municipalities.

Dividends, interest and royalties are taxed at the rate of 15%.

Capital Gains Tax

Gains from the sale of assets are taxed at the rate of 15%.

CFC Rules

None.

Withholding Tax

Dividend and, in general, interest payments are subject to withholding tax at the rate of 15%, royalties – at the rate of 25%.

Withholding tax may also be levied on other payments.

VAT

The standard VAT rate is 13%.

The reduced rates of 4%, 2% and 1% apply to some goods and services.

Social Security Contributions

Social security contributions are paid by the employee at the rate of 10.5% and by the employer at the rate of 26.33% of the employment income.

Property Tax

Property tax is levied at the rate of 0.25% on the appraised value determined by the municipal authorities.

An additional “solidarity” tax is levied on luxury residential properties.

Real Estate Transfer Tax

Real estate tax is levied at the rate of 1.5% of the selling price or of the assessed tax value of the property, whichever is higher.

The tax is also levied on the sale of real estate company shares.

Stamp Duty

Stamp duty can be levied as CRC 5 for every CRC 1,000 of the contract value in relation to various transactions.

Double taxation treaties

Costa Rica entered into the following tax information exchange arrangements:

3 DTC: Germany, Mexico, Spain .

22 TIEAs: Argentina, Australia, Canada, Denmark, Ecuador, El Salvador, Faroe Islands, Finland, France, Greenland, Guatemala, Guernsey, Holland, Honduras, Iceland, Mexico, Nicaragua, Norway, South Africa, South Korea, Spain, and Sweden.

Exchange Control

There is generally no restriction on foreign exchange transactions.

There are rules for currency exchange and registration of capital imported for investment, to ensure its subsequent unhindered repatriation.

    Taxes of Costa Rica

    Min. rate for corporate tax 30%
    Capital gains tax 15%
    VAT 13%
    Withholding tax 15%/15%/25%
    Exchange control No
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