For expatriates and Costa Ricans alike, navigating the tax landscape is an integral part of living in this Central American paradise.
While not an exhaustive guide, this article sheds light on the most common taxes that individuals, residents, and property owners may encounter in Costa Rica.
For expatriates and Costa Ricans alike, navigating the tax landscape is an integral part of living in this Central American paradise. While not an exhaustive guide, this article sheds light on the most common taxes that individuals, residents, and property owners may encounter in Costa Rica.
1. Import Tax (Impuesto de Importación):
Overview:
- Applicability: Every imported product not covered by a commercial treaty pays import tax based on the C.I.F. value.
- Calculation: Charged over the invoiced C.I.F. value, the tax applies to goods brought into the country.
- Examples: Products purchased locally have the tax included, but items ordered online incur additional charges at customs.
- Household Goods and Cars: Import tax must be paid on the value of household goods and cars brought into Costa Rica.
2. Sales Tax (Impuesto de Ventas or IVA):
Overview:
- Applicability: All products and most services, excluding essentials in the canasta básica, attract a 13% sales tax.
- Canasta Básica: Basic products like food, medicine, and educational supplies are exempt from sales tax.
- Considerations: Rental income is subject to the 13% sales tax.
3. Income Tax (Impuesto de la Renta):
Overview:
- Applicability: Individuals or corporations generating income in Costa Rica must pay income tax.
- Deadline: Due before December 15 annually, following the Costa Rica tax year from October 1 to September 30.
- Foreign Income: Foreign income already taxed in the country of generation is exempt in Costa Rica.
- Tax Brackets:
- No tax on income up to CRC 619,000
- 10% tax on income between CRC 619,000 and 929,000
- 15% tax on income over CRC 929,000
4. Capital Gains Tax:
Overview:
- Costa Rican Perspective: Costa Rica does not impose a capital gains tax.
- International Considerations: Individuals should check their home country’s regulations, as capital gains taxes may apply to gains in Costa Rica.
5. Property Tax (Impuesto sobre la Propiedad):
Overview:
- Applicability: Property owners must pay annual property tax, payable quarterly, based on the registered value in the municipality.
- Discounts: Many municipalities offer discounts for paying the full year in advance.
- Declaration: Property owners declare the property value, or the municipality’s engineering department may do it.
- Tax Rate: Fixed at 0.25% of the registered property value.
6. Luxury Home Tax (Impuesto Solidario):
Overview:
- Applicability: Payable before January 15 each year for properties with a construction value exceeding ¢128 million.
- Tax Rate: Ranges from 0.25% to 0.55% of the total property value, including land.
- Assessment: Property owners unsure of their property’s value can hire a licensed appraiser.
7. Road Tax (Marchamo):
Overview:
- Annual Requirement: Due between the second half of November and December 31 each year.
- Coverage: Pays for the vehicle circulation permit and may include unpaid tickets.
- Sticker Requirement: A sticker received upon payment must be affixed to the windshield to avoid potential penalties.
8. Corporation Tax (Impuesto de Sociedades):
Overview:
- Dynamic Changes: Subject to frequent changes; consultation with an accountant is advisable.
9. FBAR for US Citizens:
Overview:
- Requirement: U.S. citizens and green card holders must file FBAR if foreign financial accounts exceed $10,000.
- Marriage Consideration: Married U.S. citizens in Costa Rica must choose their tax filing status.
Conclusion:
While this guide provides insights into common taxes, individual circumstances may vary. Professional advice from an accountant is essential for navigating the intricacies of Costa Rican taxation. Always consult with a tax professional for up-to-date and personalized guidance on your specific situation.