Taxation in Costa Rica
1. Value-added tax
A taxpayer is any natural or legal person who regularly sells goods or provides services, including the import of tangible and intangible assets. The general VAT rate is 13%, which applies to the net selling price.
2. Consumption tax
Applies to any product that is considered a luxury item by law. The tax rate applied depends on the type of product.
3. Income tax
Costa Rica’s income tax system is based on the principle of territoriality. Thus, only income derived from Costa Rican sources is subject to income tax, regardless of nationality, domicile or place of registration of the taxpayer. SAs generating income from Costa Rican sources are generally subject to income tax of 30% (although smaller companies are entitled to lower tax rates).
4. Dividend tax
SAs in Costa Rica must withhold 15% of dividends paid to foreign shareholders and local individuals and legal entities.
5. Capital gains tax
15%. Capital gains are defined as income received from the transfer of movable property, immovable property, as well as capital gains and losses.
6. International transfer tax
Costa Rican-sourced income paid to recipients residing abroad is subject to Costa Rican withholding tax. Certain income from sources in Costa Rica is subject to section 55 of the Income Tax Act, which sets out a list of special cases of income derived from sources in Costa Rica. The applicable tax rates depend on the type of income.
7. Property tax
- Property is subject to two different taxes:
Property tax. This tax is equivalent to 0.25% of the registered value of the property. It is paid annually to the municipality in which the property is located.
- Real estate transfer tax is equivalent to approximately 1.5% of the transfer price specified in the transaction or the registered value of the property, whichever is greater.
8. Stamp duty
0.5% must be paid on most documents used in courts or government offices, as well as on many private transactions.