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2026 Tax Guide for Foreigners

Costa Rica has one major peculiarity: the tax system is territorial. It only taxes what is generated within the country. For many foreigners with income from abroad, this completely changes the calculation.

Territorial system: the key piece

While the United States and many countries tax their residents on their global income, Costa Rica only taxes income from Costa Rican sources. If you work remotely for a US company and live in CR, that income does not pay Costa Rican income tax — but it may still be taxed in the US (Americans pay taxes based on citizenship, not residency).

Fiscal residency vs. immigration residency

These are different things. You are a fiscal resident in CR if you spend 183 days or more in the country in a calendar year, or if your center of economic interests is here. You can have DIMEX (immigration residency) and not be a fiscal resident — and vice versa.

This distinction matters for fiscal residency certificates, double taxation treaties, and reports to your home country (FATCA for Americans, CRS for Europeans).

Summary table of relevant taxes

Income Tax (Individuals)

0% – 25%

Tax base

Income generated in Costa Rican territory (territorial system, not global).

Notes

Progressive brackets. First bracket exempt: ¢4,181,000/year (~US$8,200). Highest bracket (25%): income above ¢29,005,000 (~US$56,900). CR does NOT tax income generated outside the country by fiscal residents.

Income Tax (Corporations)

10% – 30%

Tax base

Profits of the corporation (SA or SRL) generated in CR.

Notes

Small companies: 10–20%. Medium/large companies: 30%. If the corporation only holds passive properties and generates no income, income tax doesn't apply — but the inactive corporation tax (~US$110/year) does.

VAT (Value Added Tax)

13% (general)

Tax base

Sale of goods and provision of services.

Notes

Reduced rates: 4% (private medical services, tourism packages), 2% (medications, basic products), 1% (basic food basket). If you invoice in CR, you must charge VAT and declare it monthly.

Real Estate Tax

0.25% annually

Tax base

Registry value of the property.

Notes

Collected by the municipality. Value declaration made every 5 years.

Solidarity Tax (Luxury Homes)

0.25% – 0.55% annually

Tax base

Construction value + land when construction value exceeds ¢162,000,000 (~US$318,000).

Notes

Applies only if the CONSTRUCTION value exceeds the threshold. Paid by the owner even if the house is vacant.

Transfer Tax (when buying property)

1.5%

Tax base

Purchase price declared in the deed.

Notes

Paid once at the time of property registration. Total with stamps and attorney fees: typically 3–4% of purchase price.

Inactive Corporations

Fixed annual fee

Tax base

Corporations with no economic activity.

Notes

In 2026: ~¢68,000/year (~US$130). If you have an SA just for a property, you still owe this.

Corporation or individual: which one suits you?

Many foreigners' first instinct is to open a corporation 'just in case.' That's old thinking. Today:

Individual (persona física): simpler, less expensive (~US$200/year for an accountant), no corporate tax. Recommended if your activity is freelance, renting ONE property, or modest passive income.
Corporation (SA / SRL): makes sense if you have multiple properties, employees, or active business cash flow. Cost: ~US$1,200–US$2,500/year between incorporation, books, and accountant. Benefit: asset separation, estate planning.

Double taxation

Costa Rica has bilateral treaties with Spain, Germany, Mexico, UAE, and a few others. If you're from a country without a treaty (most), the territorial rule + foreign tax credit in your home country applies — depends on your local legislation.

Americans: required to report global income to the IRS even if living abroad. Can use the FEIE (Foreign Earned Income Exclusion) up to ~US$130,000/year (2026). Find a CPA with international experience.

FATCA and CRS

If you're American, your Costa Rican bank will report your accounts to the IRS (FATCA). If you're European or from another OECD country, the report goes via CRS to your home country's tax authority. It's not optional or avoidable; it's an automatic protocol between financial institutions.

Connection with the professional network

To structure your taxes properly you need an accountant and, depending on your situation, a tax lawyer. We have contacts in Allies who understand international taxation, not just CR.

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