Costa-Rica tax system: audit, reporting and optimization of taxation of Сosta Rican companies and individuals: VAT, income tax and capital gains. Tax treaties of Costa Rica.
Basic taxes (briefly)
|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|
|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.|
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%.
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.
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 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 can be levied as CRC 5 for every CRC 1,000 of the contract value in relation to various transactions.
International tax treaties
Costa Rica has 3 Double Tax Treaties (DTC) and 22 Tax Information Exchange Agreements (TIEA) with the following jurisdictions:
3 DTC: Germany, Mexico, Spain .
22 TIEAs: Argentina, Australia, Canada, Denmark, Ecuador, El Salvador, Faroe Islands, Finland, France, Greenland, Guatemala, Guernsey, Hollan
In addition, Costa Rica has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI entered into force for Costa Rica on January 1, 2021.
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%|