Jurisdiction overviewTax in Costa Rica
Last reviewed: · by TaxProsRated editorial
Key points
Costa Rica's Direccion General de Tributacion (DGT) administers a progressive personal income tax with five brackets topping at 25%, a 30% standard corporate rate (SME tiers from 5%), and IVA (VAT) at 13% under the 2019 Ley 9635 reform. Costa Rica joined the OECD in 2021 — the first Central American member. The Costa Rican Colon (CRC) is the legal currency; USD is widely accepted in commerce. Costa Rica abolished its army in 1948 — the most stable democracy in Central America.
Who is the tax authority?
Direccion General de Tributacion (DGT), part of the Ministerio de Hacienda, administers Costa Rica's tax system. Customs falls under the Direccion General de Aduanas (DGA). Large taxpayers are managed through the Direccion de Grandes Contribuyentes Nacionales.
Filings flow through the DGT Tributacion Digital portal, one of the earliest electronic-filing systems in Central America. Tax disputes go through DGT internal review, then the Tribunal Fiscal Administrativo, then the Sala Primera of the Corte Suprema for cassation.
The principal credentialed profession is the Contador Publico Autorizado, regulated by the Colegio de Contadores Publicos de Costa Rica. Core statutes include Ley 7092/1988 (Income Tax Law), Ley 9635/2018 (the broad VAT reform), and the Codigo de Normas y Procedimientos Tributarios (Ley 4755).
What is the tax year and when are returns due?
Costa Rica uses the calendar year (1 January to 31 December). The prior 30 September fiscal year was changed to a calendar year by Ley 9635, effective from 2020. Employment income is fully withheld monthly by employers.
Corporate quarterly advance payments are due 30 June (25% of prior year tax), 30 September (50%), and 31 December (25%). VAT returns (D-104) are due monthly by the 15th of the following month.
Who counts as a Costa Rican tax resident?
An individual is tax resident in Costa Rica if physically present for more than 183 days in a calendar year, or if they are a Costa Rican state employee working abroad. Meeting either test triggers resident status.
The key feature of the Costa Rican system is territorial-source taxation: both residents and non-residents are taxed only on Costa Rican-source income. Foreign-source income is outside the tax base entirely — a structural difference from worldwide-income jurisdictions like the US or UK.
2023 amendments introduced anti-avoidance provisions for passive foreign income inside multinational groups. The underlying territorial principle remains intact for individuals outside MNE structures.
What are the personal income tax rates?
Costa Rica taxes employment income (Impuesto sobre las rentas del trabajo dependiente) using monthly brackets. Self-employed income (Impuesto sobre las utilidades) uses an equivalent annual structure. All thresholds are revalued annually.
| Monthly employment income (CRC) | Tax rate |
|---|---|
| Up to 941,000 | 0% |
| 941,001 to 1,381,000 | 10% |
| 1,381,001 to 2,423,000 | 15% |
| 2,423,001 to 4,845,000 | 20% |
| Over 4,845,000 | 25% |
On top of income tax, mandatory Caja Costarricense de Seguro Social (CCSS) contributions apply:
| Charge | Employee | Employer |
|---|---|---|
| CCSS (health + pension) | 10.67% | 26.67% |
| Investment income (dividends, interest) | 15% flat | — |
| Capital gains (Ley 9635 permanent regime) | 15% flat | — |
Costa Rica's combined CCSS contribution burden is among the highest in Latin America, funding universal healthcare and the national pension system.
How does corporate tax work?
The standard corporate income tax (Impuesto sobre las utilidades) rate is 30% for entities with gross income above CRC 119,629,000 (2024 threshold). Small and medium enterprises below that threshold use a tiered system.
Gross income above CRC 119.6M. Covers most incorporated entities — services, tech, manufacturing, hospitality, export-oriented firms.
Licensed Zona Franca entities meeting substance requirements. 4-year income-tax holiday, then a 50% reduction for the following 4 years. Key sector for Intel, medical devices, and IT services.
SME tiered rates (2024 thresholds, gross income below CRC 119.6M):
| Net profit band (CRC) | Rate |
|---|---|
| First 5,761,000 | 5% |
| 5,761,001 to 8,643,000 | 10% |
| 8,643,001 to 11,524,000 | 15% |
| 11,524,001 to 119,629,000 | 20% |
Withholding on dividends paid to non-residents is 15% (treaty rates apply where a DTA exists). Royalties and technical services face 25% default withholding. Interest faces 15%. Tax losses carry forward for 5 years. Carryback is not available. Transfer pricing under Article 81 bis of the Income Tax Law follows OECD principles; master file, local file, and CbCR apply for in-scope groups under the post-OECD-accession framework.
What about IVA and other indirect taxes?
Costa Rica's VAT is called IVA (Impuesto al Valor Agregado). It was introduced by Ley 9635 effective 1 July 2019, replacing the prior 13% sales tax on goods with a broader 13% tax covering both goods and services. The reform was a cornerstone of the 2018 fiscal consolidation package.
| Rate | Applies to |
|---|---|
| 13% | Standard rate — goods and services |
| 4% | Private health services and certain medications |
| 2% | Medications and qualifying agricultural inputs |
| 1% | Basic-basket foodstuffs (canasta basica) |
| 0% | Exports of goods and services (zero-rated) |
| Exempt | Public health, public education, financial services, residential rental |
Comprobantes Electronicos (electronic invoicing) have been mandatory since 2018 and are required for IVA input-credit claims. A reverse-charge mechanism applies to imported services. Foreign B2C digital-service suppliers must register for IVA under successive amendments.
What is the currency framework?
The Colon is the official legal currency, managed under a floating exchange-rate regime by the Banco Central de Costa Rica (BCCR). The US Dollar is widely accepted in commerce — tourism, real estate, and many professional-services contracts are denominated in USD. Tax filings and official thresholds are always stated in CRC.
The dual-currency environment creates a practical compliance consideration: USD-denominated income and contracts must be converted to CRC at the BCCR official rate for tax-return purposes. Gains or losses on USD-CRC fluctuation may fall within taxable income categories depending on the activity.
No standing army — what makes Costa Rica distinctive?
No standing army — resources to education and healthcare instead
Costa Rica abolished its military after the 1948 civil war. Article 12 of the 1949 Constitution permanently bans a standing army. Defense spending redirected to education and the universal healthcare system funded by CCSS contributions. This institutional stability underpins Costa Rica's position as the most stable democracy in Central America — and a key draw for foreign direct investment in tech manufacturing and eco-tourism.
What is the treaty network?
Costa Rica has approximately 7 active bilateral tax treaties covering Spain, Germany, Mexico, UAE, Switzerland, South Korea, and a small number of additional partners. The MLI was signed on 7 June 2017 and ratified on 17 December 2019, with treaty modifications entering force from 1 April 2020 onward.
The absence of a US-Costa Rica DTA is the most significant gap in the network. US persons with Costa Rican-source income rely on the US-CR TIEA for information exchange only — no reduced withholding rates and no treaty tie-breaker provisions. Costa Rica is a Common Reporting Standard (CRS) adopter; DAC2 data exchange is active. The standard statute of limitations is 4 years from the filing deadline; 10 years for fraud or non-filing.
OECD membership and Pillar Two
Costa Rica acceded to the OECD on 25 May 2021 — the fourth Latin American country admitted, joining Mexico, Chile, and Colombia. Accession came with post-accession reform commitments including expanded transfer-pricing rules under Article 81 bis, CRS adoption, and progressive alignment with BEPS outputs.
Pillar Two (global minimum tax) transposition was under Asamblea Legislativa consideration through 2024 and expected to be enacted during 2025-2026. In-scope MNE groups with Costa Rican operations should monitor for legislative developments before year-end provisions.
Where does Costa Rica sit in the regional cohort?
Costa Rica anchors the OECD-LATAM Central American cohort alongside Mexico, Chile, and Colombia — the four Latin American OECD members. The wider Central American region includes non-OECD neighbors with distinct tax frameworks.
How are cryptoassets taxed?
Costa Rica has no dedicated crypto-asset tax law. The Banco Central de Costa Rica (BCCR) has stated that cryptoassets are not legal tender and are not regulated as financial instruments. The DGT treats them as capital assets under the existing framework.
The Superintendencia General de Entidades Financieras (SUGEF) has issued AML compliance guidance for entities dealing with virtual assets. A dedicated Crypto Asset Service Provider (CASP) licensing framework remains pending Asamblea Legislativa consideration.
Under the territorial principle, Costa Rican-source crypto gains — including activity on locally-operated exchanges and mining conducted in Costa Rica — are subject to standard income-tax rates. Foreign-source crypto income falls outside the Costa Rican tax base for individuals outside MNE structures. NFTs and stablecoins are handled on a case-by-case basis under the same framework.
Eco-tourism and Intel tech manufacturing
Costa Rica's economy rests on three pillars: eco-tourism (about 8% of GDP), high-tech manufacturing anchored by Intel's chip-assembly facility and a growing medical-devices cluster, and agricultural exports (coffee, bananas, pineapples). The Zona Franca (Free Zone) framework has been critical in attracting Intel, Baxter, and Boston Scientific.
Population is approximately 5 million. The combination of political stability, the no-army dividend redirected to education and healthcare, and a well-educated workforce makes Costa Rica Central America's most active destination for foreign direct investment in knowledge-intensive sectors.
Common pitfalls for foreign taxpayers
Cross-border operators and foreign nationals face a set of recurring traps in the Costa Rican system:
The prior 13% sales tax covered goods only. Ley 9635 expanded IVA to services from 1 July 2019. Businesses that transitioned without updating invoicing and compliance systems may carry undetected liability from the reform date forward.
The four-tier SME rate (5-20%) depends on gross income staying below CRC 119.6M. Crossing the threshold in a tax year triggers the full 30% rate. Active gross-income monitoring is required to avoid an unexpected mid-year rate shift.
Many commercial contracts are denominated in USD. All tax filings must state amounts in CRC at the BCCR official rate. Exchange-rate gains and losses on USD-CRC movements may be taxable depending on the underlying activity — often missed by foreign-managed entities.
US persons with Costa Rican-source income have no treaty-rate reductions on withholding. Dividends, royalties, and technical-services payments face full domestic withholding rates. The TIEA only supports information exchange.
Costa Rica is an active CRS adopter with DAC2 data exchange running. Undeclared foreign bank accounts held by Costa Rican residents are visible to DGT via automatic exchange. Voluntary disclosure before DGT contact is consistently more favorable than audit resolution.
The 0% Zona Franca rate requires active register compliance. Losing Zona Franca status immediately triggers the ordinary 30% corporate rate — retroactively from the non-compliance date. Substance requirements are progressively enforced post-OECD accession.
Employer CCSS contributions of 26.67% plus employee-side 10.67% make Costa Rica's social-contribution burden one of the highest in Latin America. Service businesses with large headcounts regularly underestimate effective staff costs.
Pillar Two GloBE transposition was under active Asamblea Legislativa consideration through 2024 and expected in 2025-2026. In-scope MNE groups with Costa Rican entities should model both scenarios — pre- and post-enactment — in year-end tax provisions.
When should you talk to a Costa Rican tax pro?
Some situations are straightforward to handle through DGT Tributacion Digital. Others need professional input:
Specific triggers for professional input include: self-employment income requiring a D-101 return; ownership of a Costa Rican corporation (SME rate monitoring and quarterly advance payments); Zona Franca substance compliance; transactions with related parties across borders (Article 81 bis transfer-pricing documentation); MNE group exposure to Pillar Two; receiving a DGT audit notice or transfer-pricing query; and USD-denominated commercial contracts requiring CRC conversion.
This page is general information. It is not personal guidance for your specific situation. Tax rules change and thresholds are revalued annually. Always confirm current figures on the DGT website or with a licensed Contador Publico Autorizado before filing.
Frequently asked
Who is the Costa Rican tax authority?
Direccion General de Tributacion (DGT), under the Ministerio de Hacienda, administers Costa Rica's income tax and VAT. Customs falls under Direccion General de Aduanas (DGA). Large taxpayers are handled by Direccion de Grandes Contribuyentes Nacionales. Filings go through the Tributacion Digital portal. The principal credentialed profession is the Contador Publico Autorizado regulated by the Colegio de Contadores Publicos de Costa Rica.
When is the Costa Rican annual return due?
D-101 returns (both PIT for self-employed and CIT for entities) are due 15 March of the year following the calendar tax year. Employment income is fully withheld monthly — no annual return required for wage earners. Corporate quarterly advance payments are due 30 June (25% of prior year tax), 30 September (50%), and 31 December (25%). IVA D-104 monthly by the 15th of the following month.
Who is a Costa Rican tax resident?
Tax residents are physically present more than 183 days in a calendar year, or are Costa Rican state employees working abroad. Costa Rica uses territorial-source taxation: residents and non-residents alike are taxed only on Costa Rican-source income. Foreign-source income is outside the tax base. 2023 amendments introduced anti-avoidance rules for MNE passive foreign income but the underlying territorial principle remains.
What are the Costa Rican personal income tax rates?
Five monthly brackets for employment income: 0% up to CRC 941k; 10% on 941k-1,381k; 15% on 1,381k-2,423k; 20% on 2,423k-4,845k; 25% above 4,845k (2024 thresholds, annually revalued). CCSS social security: 10.67% employee-side plus 26.67% employer-side. Investment income (dividends, interest) 15% flat. Capital gains 15% flat under Ley 9635 permanent regime.
How does Costa Rica's corporate tax work?
Standard 30% for entities with gross income above CRC 119.6M (2024). SME tiers: 5% (first CRC 5.76M net profit), 10% (to 8.64M), 15% (to 11.52M), 20% (to 119.6M). Zona Franca licensed entities: 0% for 4-year income-tax holiday then 50% reduction. Non-resident dividend withholding 15% (treaty rates apply). Tax losses carry forward 5 years. Pillar Two transposition pending.
What is the Costa Rican IVA rate?
Standard IVA 13% under Ley 9635 (converted prior 13% sales tax on goods to broad VAT covering goods and services from 1 July 2019). Reduced rates: 4% private health, 2% medications and agricultural inputs, 1% basic-basket foodstuffs. Zero-rated exports. Exempt: public health, public education, financial services, residential rental. Comprobantes Electronicos mandatory since 2018.
How does Costa Rica tax cryptoassets?
No dedicated crypto-asset tax framework. BCCR advisory: cryptoassets are not legal tender and not regulated as financial instruments. DGT treats them as capital assets. Under the territorial principle, Costa Rican-source crypto activity is subject to standard income-tax rates; foreign-source crypto income is outside the tax base. Mining and staking in Costa Rica are business income. SUGEF AML guidance applies. CASP licensing framework is pending Asamblea Legislativa.
How many tax treaties does Costa Rica have?
Approximately 7 active bilateral tax treaties (Spain, Germany, Mexico, UAE, Switzerland, South Korea, and others). No US-CR DTA — a US-CR Tax Information Exchange Agreement (TIEA) covers information exchange only. Costa Rica signed the OECD MLI on 7 June 2017 and ratified on 17 December 2019 with modifications entering force from 1 April 2020. Costa Rica is a CRS adopter. Standard statute of limitations: 4 years; 10 years for fraud.
Major tax firms in Costa Rica
Verified directory of the largest accounting + tax practices operating in Costa Rica. Listings are entity-level reference cards — claim flow is open to firm representatives.
- Big 4
Deloitte Costa Rica
- Big 4
EY Central America
- Big 4
EY Costa Rica
- Big 4
KPMG Costa Rica
- Big 4
PwC Costa Rica
- National
BDO Costa Rica
- National
Crowe Horwath CR, S.A.
- National
Grant Thornton Costa Rica
- National
RSM Costa Rica
Find a tax pro in Costa Rica
Browse credentialed pros serving Costa Rica — filter by specialty, language, and credential type.
Browse the Costa Rica directorySources
The figures, dates, and rules on this page are sourced from the documents listed below. Where two sources disagree, both are listed.
- Direccion General de Tributacion (Costa Rica) · accessed
- La Gaceta (Costa Rica) · accessed
- La Gaceta (Costa Rica) · accessed
- Ministerio de Hacienda (Costa Rica) · accessed
- PwC Worldwide Tax Summaries · accessed
- La Gaceta (Costa Rica) · accessed
- La Gaceta (Costa Rica) · accessed
Important disclaimer
Informational only — not tax advice. This page summarises publicly available information about tax in Costa Rica as of July 2026. Tax laws change, individual circumstances vary, and the application of any rule depends on your specific facts.
TaxProsRated does not provide tax, legal, accounting, or financial advice. Before acting on anything you read here, consult a qualified tax professional licensed in your jurisdiction (in the US: CPA, Enrolled Agent, or attorney; in the UK: CIOT- or ATT-qualified adviser; in Australia: TPB-registered tax agent; elsewhere: a locally-licensed equivalent). TaxProsRated, its operators, and its contributors disclaim all liability for action taken in reliance on this page.