Costa Rica
Company Formation Services

Incorporating in Costa Rica
Taxation

Costa Rica
Corporate Taxes on Corporate Income

The Costa Rican tax system is based on the principle of territoriality, according to which any business that carries on industrial, agricultural, or commercial activity in Costa Rica is subject to income taxation on local income in the same way as a registered business, irrespective of the place of incorporation. Such corporations doing business in Costa Rica are subject to the permanent establishment (PE) rules.

Under the Costa Rican income tax law, income from transactions carried out abroad may be regarded as non-Costa Rican-source income and is not subject to income taxes.

In addition, it is important to bear in mind that Costa Rican income tax applies specifically to those incomes that directly originate in the lucrative activities carried out by the taxpayer within the country’s territory.

Corporate income is taxed at a 30% rate. However, the law establishes special regulations for small companies whose gross income does not exceed 106,026,000 Costa Rican colones (CRC). For this category, the following rates apply:

Corporate Tax Rates

10% for companies with gross income up to CRC 52,710,000
20% for companies with gross income of more than CRC 52,710,000, but not more than CRC 106,026,000
30% for companies with gross income over CRC 106,026,000

Please note that these corporate income tax (CIT) brackets are adjusted yearly, effective 1 October to 30 September of the following year. The tax brackets listed are for the 2015 fiscal year (i.e. 1 October 2014 to 30 September 2015).

Local income taxes

There are no provincial income taxes in Costa Rica; however, there is a municipal tax. The rate depends on the municipality in which the company is located, but most apply a percentage of net income or sales.