Income tax in Costa Rica
Taxation Researcher | July 16, 2019
INDIVIDUAL TAXATION
Residents pay tax on their worldwide income. Husband and wife are treated separately for the purpose of assessing tax on non-employment income.
The tax year runs from 01 October of the current year to 30 September of the succeeding year. The tax year 2018-2019 is from 01 October 2018 up to 30 September 2019. The tax year 2019-2020 is from 01 October 2019 up to 30 September 2020.
INCOME TAX
Income is taxed at progressive rates. Employment income is taxed separately from other income.
Tax on Employment Income
Employment income is subject to withholding taxes, levied at progressive rates.
INCOME TAX 2018-2019 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 3,628,000 (US$6,479) | 0% |
| 3,628,000 - 5,418,000 (US$9,675) | 10% on band over US$6,479 |
| 5,418,000 - 9,038,000 (US$16,139) | 15% on band over US$9,675 |
| 9,038,000 – 18,113,000 (US$32,345) | 20% on band over US$16,139 |
| Over 18,113,000 (US$32,345) | 25% on all income over US$32,345 |
| Source: Global Property Guide | |
SALARY TAX 2017-2018 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 799,000 (US$1,427) | 0% |
| 799,000 – 1,199,000 (US$2,141) | 10% on band over US$1,427 |
| Over 1,199,000 (US$2,141) | 15% on all income over US$2,141 |
| Source: Global Property Guide | |
SALARY TAX 2016-2017 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 792,000 (US$1,477) | 0% |
| 792,000 - 1,188,000 (US$2,216) | 10% on band over US$1,477 |
| Over 1,188,000 (US$2,216) | 15% on all income over US$2,216 |
| Source: Global Property Guide | |
Tax on All Income Other than Employment Income
Income from all other sources are aggregated and taxed at progressive rates. Self-employed individuals with business activities are allowed to deduct all costs and expenses necessary to produce taxable income, as well as to protect their investments.
CORPORATE TAX 2018-2019 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 54,303,000 (US$96,970) | 10% |
| 54,303,000 – 109,228,000 (US$195,050) | 20% on band over US$96,970 |
| Over 109,228,000 (US$195,050) | 30% on all income over US$195,050 |
| Source: Global Property Guide | |
INCOME TAX 2017-2018 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 3,549,000 (US$6,338) | 0% |
| 3,549,000 - 5,299,000 (US$9,463) | 10% on band over US$6,338 |
| 5,299,000 - 8,840,000 (US$15,786) | 15% on band over US$9,463 |
| 8,840,000 – 17,716,000 (US$31,636) | 20% on band over US$15,786 |
| Over 17,716,000 (US$31,636) | 25% on all income over US$31,636 |
| Source: Global Property Guide | |
INCOME TAX 2016-2017 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 3,517,000 (US$6,280) | 0% |
| 3,517,000 - 5,251,000 (US$9,377) | 10% on band over US$6,280 |
| 5,251,000 - 8,760,000 (US$15,643) | 15% on band over US$9,377 |
| 8,760,000 - 17,556,000 (US$31,350) | 20% on band over US$15,643 |
| Over 17,556,000 (US$31,350) | 25% on all income over US$31,350 |
| Source: Global Property Guide | |
Residents can deduct a number of family-related allowances from non-employment income:
- A monthly tax credit of CRC27,480 (US$49) in respect of a spouse
- A monthly tax credit of CRC18,360 (US$33) in respect of a dependent under 25 years of age
CAPITAL GAINS TAX
Capital gains are not taxed in Costa Rica unless they are derived from habitual transactions.
Capital gains derived from habitual transactions are taxed at a flat rate of 30%.
PROPERTY TAX
Real Estate/Habitation Tax (Impuesto sobre bienes inmuebles)
Property taxes are levied on the cadastral value of the property as assessed by the tax authorities. Property taxes are levied by the municipalities at the flat rate of 0.25%. The real estate tax is calculated on a calendar year basis and must be paid annually, semiannually or quarterly, depending on the municipality.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are generally subject to corporate income tax at a flat rate of 30%. Income-generating expenses are deductible when calculating taxable income.
Small companies whose gross income does not exceed a particular limit may be subject to corporate income tax at progressive rates.
CORPORATE TAX 2018-2019 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 54,303,000 (US$96,970) | 10% |
| 54,303,000 – 109,228,000 (US$195,050) | 20% on band over US$96,970 |
| Over 109,228,000 (US$195,050) | 30% on all income over US$195,050 |
| Source: Global Property Guide | |
CORPORATE TAX 2017-2018 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 53,113,000 (US$94,845) | 10% |
| 53,113,000 – 106,835,000 (US$190,057) | 20% on band over US$94,845 |
| Over 106,835,000 (US$190,777) | 30% on all income over US$190,777 |
| Source: Global Property Guide | |
CORPORATE TAX 2016-2017 |
|
| TAXABLE INCOME, CRC (US$) | TAX RATE |
| Up to 52,634,000 (US$93,989) | 10% |
| 52,634,000 – 105,872,000 (US$189,057) | 20% on band over US$93,989 |
| Over 105,872,000 (US$198,057) | 30% on all income over US$198,057 |
| Source: Global Property Guide | |
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