Decoding Taxation in Costa Rica: A Comprehensive Overview

For expatriates and Costa Ricans alike, understanding the tax landscape is part of living in Costa Rica. This is not an exhaustive guide: it covers the most common taxes that individuals, residents and property owners may meet in Costa Rica. Thresholds and rates are adjusted by the authorities, often every year, so treat the figures as a guide and confirm them with an accountant.

1. Import tax (impuesto de importación)

• Applicability: every imported product not covered by a commercial treaty pays import tax based on its C.I.F. value (cost, insurance and freight).
• Calculation: the tax is charged on the invoiced C.I.F. value and applies to goods brought into the country.
• Examples: products bought locally have the tax included, but items ordered online incur additional charges at customs.
• Household goods and cars: import tax must be paid on the value of household goods and cars brought into Costa Rica. Check the rules for your own situation before you ship.

2. Sales tax (impuesto de ventas or IVA)

• Applicability: most products and services attract 13% sales tax (IVA), except essentials in the canasta básica.
• Canasta básica: basic products such as food, medicine and educational supplies are generally exempt or taxed at a reduced rate.
• Considerations: the IVA treatment of rental income depends on how the property is used. Short-term stays of under 30 days are generally subject to 13%; see our rental markets guide. Confirm your own position with an accountant.

3. Income tax (impuesto de la renta)

• Applicability: individuals or corporations generating income in Costa Rica must pay income tax.
• Deadline: due before 15 December annually, following the Costa Rican tax year from 1 October to 30 September.
• Foreign income: Costa Rica has traditionally taxed only income generated in the country, so foreign income already taxed where it was generated has generally been exempt. Rules for certain passive foreign-source income, such as interest and dividends, have changed in recent years, so take advice.
• Tax brackets: for employment income, the figures we have published are no tax on income up to ₡619,000, 10% on income between ₡619,000 and ₡929,000, and 15% on income above ₡929,000. The brackets are updated by the authorities (monthly figures, adjusted each year), so check the current table with an accountant.

4. Capital gains tax

• Costa Rican perspective: since the 2019 public finance reform (Law 9635), a profit on the sale of property can be taxed. For most individual sellers the rate is 15% of the net gain, and a primary residence is generally exempt. Older purchases may qualify for an alternative flat calculation. Our guide to the costs of selling property in Costa Rica explains the rules and shows worked examples.
• International considerations: check your home country’s rules, as capital gains tax may also apply to gains made in Costa Rica.

5. Property tax (impuesto sobre la propiedad)

• Applicability: property owners must pay annual property tax, payable quarterly, based on the value registered in the municipality.
• Discounts: many municipalities offer discounts for paying the full year in advance.
• Declaration: owners declare the property value, or the municipality’s engineering department may do it.
• Tax rate: fixed at 0.25% of the registered property value.

6. Luxury home tax (impuesto solidario)

• Applicability: payable each year for properties with a construction value above a threshold, which we have published as ¢128 million. The threshold is adjusted annually, so check the current figure; the payment date is also set each year.
• Tax rate: ranges from 0.25% to 0.55% of the total property value, including land.
• Assessment: owners unsure of their property’s value can hire a licensed appraiser.

7. Road tax (marchamo)

• Annual requirement: due between the second half of November and 31 December each year.
• Coverage: pays for the vehicle circulation permit and may include unpaid fines.
• Sticker requirement: a sticker received on payment must be affixed to the windscreen to avoid penalties.

8. Corporation tax (impuesto de sociedades)

• Dynamic changes: subject to frequent changes; consulting an accountant is advisable. Many properties are held through a company, so ask about its annual obligations before you buy.

9. FBAR for U.S. citizens

• Requirement: U.S. citizens and green card holders must file an FBAR if their foreign financial accounts exceed $10,000 in total.
• Marriage consideration: married U.S. citizens in Costa Rica must choose their tax filing status.

U.S. citizens should also read our guide to U.S. and Canadian financing and, if retiring here, retiring in Costa Rica.

Conclusion

While this guide gives an overview of common taxes, individual circumstances vary. Professional advice from an accountant is essential for navigating Costa Rican taxation. Always consult a tax professional for up-to-date, personalised guidance on your situation.

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This is general information, not tax, legal or financial advice. Tax rates, thresholds, deadlines and exemptions are set by the Costa Rican authorities, change often and depend on your circumstances; confirm them with the Ministerio de Hacienda and a Costa Rican accountant, and with your home country’s tax authority.