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Costa Rica


If you want to incorporate a company in Costa Rica, this article will educate you on the tax laws for a S.A. which is the most common legal entity in Costa Rica.

Costa Rica has a territorial tax system. Therefore, income accrued outside the country, from our research, and this is not personal tax advice, is not subject to taxation. Costa Rica corporate highest income effective tax rate on a S.A. entity is 30%. Lower rates apply to companies whose gross income does not exceed CRC 52,634,000 (10%) and companies whose gross income is between 52,634,000 and CRC 105,872,000 (20%). This ranks Costa Rica as 136th overall with regards to corp. taxation rate internationally.

The VAT rate in Costa Rica is 13.00%, which ranks Costa Rica as 72nd when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 26.33% to the equivalent of a social security fund and an employee will contribute 9.34%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 59hours. Contributing to this is the number of yearly labor tax payments, which is 2 in CR.

Thin capitalization restrictions aren't in effect. Thin capitalisation refers to any type of laws on given company with respect todebt-to-asset ratios. Dividends received by a Costa Rica entity, whether from local or foreign source, are tax exempt. Dividends are a distribution of a portion of a company profit, decided by the board of directors, to a particular class of shareholders. Dividends can be one of the following cash payments, shares of stock, or other property. Capital Gains are not usally subject to taxation, unless gains constitutes the habitual activity of a company. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 15%. This should be interpreted that usually the relevant tax authorities expects companies to automatically withhold 15% of payments abroad on interest payments. The dividends withholding tax rate is 15%. This means that the taxman expects S.A.'s to pay tax on at least 15% of dividends remitted abroad, the rate is 5% of dividends paid by listed stock corporations. The royalties withholding tax rate is 25%. This should be interpreted that usually the tax authorities expects companies to pay tax on at least 25% of payments abroad on royalties.
There is no known tax on wealth in Costa Rica. There are no known inheritance taxes in CR. There are real property and transfer taxes. There are several free trade areas that may provide tax exemptions.

The above is not tax or legal advice for your company circumstances. can refer you to a tax advisor in Costa Rica who can properly advise you. Ready to get started? Click the free consultation button above.

Country details

Costa Rica
San José
North America
Spanish (Costa Rica), English

Tax treaties

Country Type Date Signed
Sweden TIEA 2011-06-29
Honduras TIEA 2006-04-26
France TIEA 2010-12-16
Norway TIEA 2011-06-29
South Africa TIEA 2012-10-27
Nicaragua TIEA 2006-04-25
Mexico DTC  2014-04-12
Germany DTC  2014-02-13
United States TIEA 1989-03-15
Argentina TIEA 2009-11-23
Faroe Islands TIEA 2011-06-29
Guernsey TIEA 2014-03-05
Sint Maarten TIEA 2012-10-27
El Salvador TIEA 2006-04-25
Denmark TIEA 2011-06-29
Australia TIEA 2011-07-01
Greenland TIEA 2011-06-29
Finland TIEA 2011-06-29
Ecuador TIEA 2013-06-04
Spain DTC  2004-05-04
Canada TIEA 2011-08-11
Iceland TIEA 2011-06-29
Netherlands TIEA 2011-03-29
Guatemala TIEA 2006-04-25

Tax treaties Map



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