Taxation of companies in Costa Rica
Starting your own company in Costa Rica is not too difficult a process. However, it is always tedious to take into account all the nuances and study all the necessary information before starting any business. Many issues can be resolved differently in each country. For example, taxation in the country. When starting a business, taxes are the first thing to learn.
Taxation issues in Costa Rica are governed by two main regulations:
- Tax Law (Ley de justica tributaria)
- Tax Adjustment Act (Ley de ajuste tributario)
For tax purposes in Costa Rica, the determining criterion is not the residence of the subject of taxation, but the place of income. Income in Costa Rica is taxed on a territorial basis, which means that any income earned outside Costa Rica is exempt from taxes.
First of all, it should be noted that only income earned in Costa Rica is taxed.
It is known that the standard income tax rate in Costa Rica can be 30%.
In addition, there are also reduced tax rates. They can be 20 and 10% depending on the amount of profit.
Capital gains tax
The standard capital gains tax rate in Costa Rica can be 15%.
Value Added Tax (VAT)
VAT (Impuesto de Valor Agregado -IVA) was introduced in July 2019. The standard VAT rate in Costa Rica can be 13%. The standard rate of 13% applies to most goods and services in Costa Rica. In addition to the standard VAT rate, there are also three reduced rates, namely 4% (healthcare services, air tickets), 2% (private educational services, medicines) and 1% (household goods).
Royalty Income Tax
The standard rate is 25%.