Costa Rica applies a strict territorial taxation system, which is a key advantage of this jurisdiction.
- Income sourced outside Costa Rica: not subject to corporate income tax
- Income sourced within Costa Rica: subject to corporate income tax under a progressive scale
- Dividend tax: withheld only when profits are distributed from locally taxable income
- Value Added Tax (VAT): applies exclusively to domestic transactions within Costa Rica
- Capital gains tax: applies only to the disposal of assets connected to Costa Rica
Costa Rica is not positioned as an aggressive tax-planning jurisdiction; however, under an international business model, it allows foreign-source income to be lawfully excluded from taxation.
Reporting and Compliance in Costa RicaUnlike classic offshore jurisdictions, Costa Rica requires basic tax and corporate compliance, which increases its credibility with banks and financial institutions.
- Accounting records: mandatory
- Annual tax return: must be filed even in the absence of taxable income
- Public financial reporting: not required
- Audit: required only if certain thresholds are exceeded or for regulated activities
- CRS: Costa Rica participates in the automatic exchange of tax information
Companies must be able to substantiate the economic substance of their operations and maintain sufficient documentation for tax and banking compliance reviews.