Taxes in Costa Rica
Costa Rica uses a territorial tax system — only income earned within Costa Rica is subject to taxation. Foreign-sourced income is generally not taxed.
Will I be taxed on my foreign income in Costa Rica?
Generally no. Costa Rica uses a territorial tax system, meaning only income earned within Costa Rica is subject to taxation. If you work remotely for a foreign company and earn income sourced outside Costa Rica, that income is typically not taxed by Costa Rica. However, tax laws can be complex — consult a local tax professional for your specific situation.
Territorial Tax System
Costa Rica's territorial tax system is one of its most attractive features for expats and digital nomads. Unlike countries with worldwide taxation (such as the United States), Costa Rica only taxes income generated from activities within its borders.
Tax Categories
Personal Income Tax (Impuesto sobre la Renta)
Progressive tax on Costa Rica-sourced employment and business income.
- Territorial system: only CR-sourced income is taxed
- Employed individuals are taxed at progressive rates
- Self-employed/business income taxed at up to 25%
- Tax year runs January to December
- Annual tax return due by March 15
Value Added Tax (IVA)
A 13% VAT applies to most goods and services.
- Standard rate is 13% on most goods and services
- Basic food items (canasta básica) are exempt or reduced
- Some services have reduced rates (4%, 2%, or 1%)
- Health services and education are generally exempt
- Included in displayed prices at retail
Property Tax (Impuesto sobre Bienes Inmuebles)
Annual property tax of 0.25% of the registered property value.
- Very low compared to most countries
- Based on the registered/declared property value
- Paid quarterly to the local municipality
- Luxury Home Tax applies to homes valued over ~$240,000
Corporate Income Tax
Corporate tax rates vary based on gross income.
- Standard rate is 30% for large companies
- Reduced rates for small businesses (5%, 10%, 15%, 20%)
- All corporations must file annual returns
- Withholding taxes apply to certain payments
Professional Advice
Tax laws change and individual circumstances vary. This page provides a general overview only. For specific tax advice regarding your situation, consult a qualified Costa Rican tax professional (contador publico autorizado).