Taxes in Costa Rica

In Costa Rica, there are various taxes that individuals and businesses may be required to pay. The tax system in Costa Rica includes both direct and indirect taxes. Here is an overview of some of the key taxes:

Income Tax (Impuesto sobre la Renta):

Individuals and companies are subject to income tax in Costa Rica. The rates vary depending on the type of income and the taxpayer’s residency status. Residents are taxed on their worldwide income, while non-residents are taxed only on their Costa Rican-sourced income.

Value Added Tax (Impuesto sobre el Valor Agregado – IVA):

IVA is a consumption tax applied to the sale of goods and services. The standard rate is typically 13%, but there are reduced rates for certain essential goods. Some transactions, such as medical services and education, may be exempt from IVA.

Property Transfer Tax (Impuesto de Traspaso):

This tax is applied to the transfer of real estate properties. The rate is typically 1.5% of the property’s registered value. Both the buyer and the seller may have obligations related to this tax.

Capital Gains Tax (Impuesto sobre las Ganancias de Capital):

Capital gains tax is applied to the profit generated from the sale of certain assets, including real estate. The rates can vary, and there may be exemptions for primary residences.

Corporate Tax (Impuesto a las Personas Jurídicas):

Entities known as “sociedades anónimas” (anonymous societies) are required to pay an annual corporate tax. The amount is determined based on the entity’s capital.

Customs Duties (Derechos de Aduana):

Customs duties are applied to imported goods. Rates can vary depending on the type of product and its origin. Some goods may be subject to exemptions or preferential rates under international agreements.

Municipal Taxes (Impuestos Municipales):

Local municipalities may levy taxes on various activities and services, such as property taxes, business taxes, and vehicle taxes. The rates and regulations can vary by municipality.

Social Security Contributions (Cotizaciones a la Seguridad Social):

Employees and employers contribute to the social security system. These contributions fund healthcare, pensions, and other social benefits.

It’s important to note that tax regulations can change, and individuals or businesses should seek advice from tax professionals or legal experts to ensure compliance with current laws. Additionally, the Costa Rican tax system is known for its complexity, so seeking guidance from local experts is advisable for accurate and up-to-date information.