Tax compliance in Costa Rica goes far beyond the mere filing of tax returns. It requires a clear understanding of how taxes are generated, when they accrue, and which formal obligations apply depending on the economic activity carried out.

In this bulletin, prepared by our trusted tax advisory partner Briffkase, we share a practical overview of the most relevant operational taxes affecting companies and independent professionals in Costa Rica, in accordance with the regulations applicable to fiscal year 2026.

General Framework of Applied Tax Knowledge in Costa Rica

This overview summarizes the key tax rules applicable during 2025–2026 and highlights essential compliance practices that organizations operating in Costa Rica must observe in order to meet their fiscal obligations properly and efficiently.

1. Identifying Regular Sources of Income

For both Value Added Tax (VAT) and Income Tax purposes, it is essential to correctly identify the type of income generated, as each category receives a specific tax treatment.

The main sources of income are classified as follows:

• Sale of goods
  Generally subject to VAT at 13%, except for basic goods (1%) or exempt items. These revenues are taxable for income tax purposes.
• Provision of services
  Typically subject to VAT at 13%, although reduced rates or exemptions may apply depending on the nature of the service.
• Leases and rentals
  Commercial leases are subject to VAT at 13%. Residential leases are VAT-exempt if they do not exceed the monthly threshold established by the Tax Authority.
• Financial income
  May be exempt from or not subject to VAT, depending on its nature. For income tax purposes, it is generally taxable unless a specific exemption applies.
• Exports of goods and services
  Subject to VAT at a 0% rate, with the right to claim input tax credits and, in some cases, request refunds. Export income remains taxable for income tax purposes.
• Mixed activities
  When taxable and exempt operations coexist, a proration method must be applied to determine the deductible portion of input VAT.

2. Value Added Tax (VAT – IVA)

VAT is one of the core pillars of Costa Rica’s tax system due to its revenue impact and daily operational relevance. Since the enactment of Law No. 9635 (Strengthening of Public Finances), VAT has been applied comprehensively with differentiated rates to balance fiscal efficiency and social protection.

Applicable VAT Rates

• 13% (General rate): Goods and services in general (e.g., clothing, restaurants, professional services).
• 4% (Reduced): Private healthcare services and medicines.
• 2% (Reduced): Authorized private education and digital books.
• 1% (Super-reduced): Basic food basket, agricultural and veterinary inputs.
• 0.5% (Special): Cargo transport and student transportation services.
• 0% (Exempt): Legally exempt goods and services (e.g., public education, residential leases below the threshold, financial services).

The ability to claim VAT credits depends on whether the activity is taxable and whether proper electronic invoices are available.

Filing Deadlines, VAT Calculation and Tax Credits

• Filing frequency: Monthly VAT return (Form D-150, currently transitioning to the Tribu-CR platform).
• Deadline: Within the first 15 calendar days of the month following the reported period. Filing is mandatory even with zero activity.
• Calculation method: Debit-credit system.
  • VAT payable = Output VAT – Input VAT
• Output VAT: VAT charged on sales, services and advances received.
• Input VAT: VAT paid on purchases and expenses directly linked to taxable activities and supported by valid electronic invoices.
• Tax credits: Excess credits may be carried forward to subsequent periods. Refunds are exceptional and mainly available to exporters or in cases of improper payments.

VAT Accrual Criterion

Under Law No. 6826 and its regulations, VAT accrues at the first occurrence of:

• issuance of the electronic invoice,
• delivery of the goods,
• effective provision of the service, or
• partial or full collection.

This means VAT must be declared and paid even if the customer has not fully settled the invoice.

3. Offset or Refund of VAT Credits

• Offsetting: The most common mechanism. Input VAT credits are offset against output VAT in the same or future periods.
• Refunds: Exceptional and subject to a formal request before the Tax Authority, typically applicable to exporters or zero-rated activities.

4. Withholding Taxes (WHT)

Costa Rica applies withholding taxes on payments to individuals and legal entities, whether residents or non-residents.

Independent Professionals

• Rate: 25% on the gross amount for residents.
• Non-residents: Reduced rates may apply if a double taxation treaty exists; otherwise, the general rate applies.
• Obligation: The payer acts as withholding agent and must declare and remit the tax.

Salaries (Employment Income)

Progressive system (2025 brackets):

• Up to CRC 922,000: exempt
• CRC 922,000 – 1,352,000: 10%
• CRC 1,352,000 – 2,373,000: 15%
• CRC 2,373,000 – 4,745,000: 20%
• Over CRC 4,745,000: 25%

Tax credits apply for dependents and spouses, and employers are responsible for monthly withholding and payment.

5. Corporate Annual Tax (Legal Entities Tax)

Regulated by Law No. 9428 and administered by the National Registry, this tax is payable annually between January 1 and January 31.

The amount depends on the company’s activity status and income level, calculated as a percentage of the monthly base salary. Penalties and interest apply if payment is late. Certain micro and small enterprises registered with MEIC or MAG may be exempt.

Need guidance?

At Blue Zone Legal, we work closely with specialized advisors like Briffkase to ensure our clients receive integrated legal and tax support in Costa Rica. Briffkase specializes in minimizing tax risk and optimizing financial planning for companies and independent professionals through a comprehensive analysis of their operational and accounting structures. Their team provides strategic guidance to support sound decision-making and regulatory compliance.

If you would like assistance assessing how these tax obligations apply to your business or investment structure, feel free to contact us.

Legal Advisory
Blue Zone Legal
📧 info@bluezonelegal.com
🌐 www.bluezonelegal.com

Tax & Accounting Advisory
Briffkase
📧 czuniga@briffkase.com
🌐 www.briffkase.com

We remain at your disposal to guide you through each step with clarity, precision, and full regulatory compliance.

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The information contained in this blog is provided for informational purposes only and does not constitute legal advice, nor does it create an attorney-client relationship. Readers should not act upon this information without seeking appropriate professional counsel.

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