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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