Costa Rica's business tax landscape includes corporate income tax, value-added tax, sales tax, payroll taxes, capital gains tax, property tax, stamp duty, and potential municipal taxes. Businesses considering operating in Costa Rica should consult with tax professionals and refer to the official website of the Costa Rican Tax Authority for the latest tax regulations and requirements. Understanding and complying with the tax obligations will contribute to a successful and compliant business operation in Costa Rica.
Corporate Income Tax:
Costa Rica operates on a worldwide income tax system, meaning that both local and foreign-source income is subject to taxation. As of the knowledge cutoff date in September 2021, the corporate income tax rate in Costa Rica is 30% on taxable profits. However, there are certain tax incentives and exemptions available for specific industries, such as tourism, agriculture, and technology.
Types of Business Taxes in Costa Rica:
- Value Added Tax (VAT): Costa Rica has a value-added tax system known as the "Impuesto sobre el Valor Agregado" (IVA). The standard VAT rate is currently set at 13%. VAT is levied on the provision of goods, services, and imports, with certain exemptions and reduced rates for specific items.
- Sales Tax: In addition to VAT, Costa Rica also levies a sales tax known as the "Impuesto General sobre las Ventas" (IGV). The sales tax rate is currently 1%, and it applies to specific goods and services, such as telecommunications, fuel, and insurance premiums.
- Payroll Taxes: Employers in Costa Rica are responsible for withholding and contributing to various payroll taxes, including social security contributions and mandatory employee benefits. These contributions fund healthcare, pensions, disability, and other social programs.
- Capital Gains Tax: Capital gains tax is applicable in Costa Rica on the sale or transfer of assets, including real estate, securities, and shares. The tax rate varies depending on the type of asset and the duration of ownership.
- Property Tax: Property tax, known as "Impuesto sobre Bienes Inmuebles" (IBI), is levied on the ownership of real estate properties in Costa Rica. The tax rate varies based on the property's value and location.
- Stamp Duty: Stamp duty, or "Impuesto de Timbres y Estampillas," is imposed on certain legal documents, including contracts, deeds, and financial instruments. The rate varies depending on the type of document.
- Municipal Taxes: Municipalities in Costa Rica have the authority to levy additional taxes on specific activities or services within their jurisdiction. These taxes may include local business taxes, advertisement taxes, and permits for operating certain businesses.
Costa Rican Tax Authority Website:
For detailed and up-to-date information on business taxes in Costa Rica, it is recommended to visit the official website of the Costa Rican Ministry of Finance, which includes the tax authority.
Costa Rican Tax Authority Website: Official Costa Rican Tax Authority Website