Costa Rica Tax Residency and the 183-Day Rule, Explained for 2026

Guides · Costa Rica

Costa Rica taxes what happens inside Costa Rica. That one idea answers most of the questions foreigners ask about their tax bill here, and most guides get it wrong.

Costa Rica tax residency sounds like the decisive question, and for most new arrivals it is not. The country taxes income by its source, not by the taxpayer’s passport or address. Crossing the 183-day line makes you a fiscal resident; it does not pull your foreign pension, foreign salary or foreign dividends into the Costa Rican tax net. What follows is where the rules actually live.

Where Costa Rica tax residency is actually defined

Article 1 of Ley 7092, the income tax law of 21 April 1988, reaches Costa Rican source income received or accrued by people and companies domiciled in the country. Then it does something unusual. It delegates the meaning of domicile to the regulation.

So the famous 183-day test is not in the statute at all. It sits in the Reglamento, the regulation that fills the law out.

Under the current Reglamento, Decreto 43198-H of 17 December 2021, the rule is at Article 10, numeral 1(a). You are fiscally resident if you stay in the country for more than 183 days in the fiscal period, continuously or not.

Counting the days, and getting the certificate

Two refinements decide most real cases. A sporadic absence of fewer than 30 consecutive calendar days still counts toward your 183 days. A long weekend in Panama resets nothing.

An absence of more than 30 continuous days does not count, unless you can prove fiscal residency somewhere else. For taxes whose period is not annual, the authority examines the 12 months before the tax fell due.

The certificate of Costa Rica tax residency is issued by the Dirección General de Tributación, the tax authority. It rests on Resolución DGT-R-065-2018, amended on 6 March 2023 by resolution MH-DGT-RES-0003-2023.

You will need that certificate whenever another country asks where you are resident.

What is taxed, and what is not

Article 1 defines Costa Rican source income in three geographic limbs: services rendered, goods located, or capital used in the national territory. Article 2 makes nationality, domicile and place of incorporation irrelevant to who pays. Only the source counts.

Taxed: a salary for work performed in Costa Rica. Also profits of a business operating here, rent from Costa Rican property, and interest on capital lent and used here. Gains on the sale of Costa Rican assets are caught as well. Note one trap. A freelancer’s fees for services physically performed in Costa Rica are Costa Rican source, even when the client sits abroad.

Not taxed: a foreign salary for work performed abroad. Nor dividends from a foreign company, interest on a foreign bank account, or rent from a house in Florida. Gains on foreign shares and a foreign pension, state or private, stay outside the tax.

Costa Rican capital income has had its own rates since 1 July 2019, under Ley 9635. The general rate is 15%, covering capital gains, rental income, dividends and most movable capital. On rent it falls on 85% of the gross after a fixed 15% expense deduction, an effective 12.75%. Real-estate funds deduct 20% instead, an effective 12%. A one-off option charges 2.25% of the sale price, not 15% of the gain, on assets acquired before July 2019. That choice is available on the first sale only. A non-resident selling property to a resident taxpayer faces a 2.5% withholding.

The 2026 rates, and when you file

Costa Rican salary is taxed on a monthly scale that a decree resets each year. For 2026 the scale is Decreto 45333-H, in force since 1 January 2026.

Colon figures in this guide use the Banco Central sale reference rate for 22 September 2026. That is a rate of 450 colones to the US dollar.

Monthly pay up to ¢918,000 (about US$2,040) is exempt. The next band, to ¢1,347,000 (about US$2,993), pays 10%, then 15% up to ¢2,364,000 (about US$5,253).

A 20% band runs to ¢4,727,000 (about US$10,504), and 25% applies above that. The self-employed use an annual scale, exempt to ¢6,244,000 (about US$13,876) and 25% above ¢20,872,000 (about US$46,382).

The fiscal period is the calendar year. The return and the payment fall due on 15 March, so income earned in 2026 is due on 15 March 2027.

Article 10 of the Código de Normas y Procedimientos Tributarios, the tax procedure code, governs deadlines. One that falls on a non-working day moves to the next working day.

Filing runs through TRIBU-CR, the platform that replaced the old ATV system on 6 October 2025.

The EU list, and what Ley 10381 really changed

On 14 February 2023 the Council of the European Union placed Costa Rica on Annex I, its list of non-cooperative jurisdictions. The stated reason was a commitment the country had not fulfilled on the harmful aspects of its foreign source income exemption regime.

Costa Rica answered with Ley 10381, published in La Gaceta 180 on 2 October 2023. The Council moved the country off Annex I on 17 October 2023 and onto Annex II, the grey list. It left Annex II on 18 February 2025, and in 2026 appears on neither list.

The politics were close. Then-president Rodrigo Chaves vetoed part of the law on 14 September 2023, preferring a rule that taxed foreign income with an economic link to Costa Rica.

The Assembly overrode that veto on 26 September 2023, by 38 votes to 15. Chaves is now minister of the presidency and of finance under President Fernández.

What the law did is narrower than most guides suggest. It did not introduce worldwide taxation. It made foreign source passive income — dividends, interest, royalties and capital gains — taxable only for an entidad no calificada. That means a member of a multinational group that cannot show real substance here: premises, qualified staff and decisions taken in the country. An ordinary resident individual and a purely domestic company stay outside it.

The two bills that would change the rules

On 22 September 2026 the government filed bill 25.796. It would charge residents 15% on five kinds of foreign passive income: interest, dividends, royalties, rents and capital gains.

The text reaches individuals as well as companies, trusts and investment funds resident here. It would drop the economic substance test and allow a credit for equivalent tax paid abroad.

A month earlier the left-wing Frente Amplio filed a rival text, expediente 25.734, on 20 August 2026. It would tax foreign passive income that derives from services, goods or capital used in Costa Rica.

That bill’s justification cites 36 administrative assessments on extraterritorial income. Delfino.cr reports finance ministry figures putting the tax at stake at ¢36,943.6 million (about US$82 million).

Both texts are awaiting assignment to a legislative committee. Neither is law, and none of it applies today.

What a retiree on a foreign pension owes

On the pension itself, no Costa Rican income tax. A pension paid from abroad, for work done abroad, has no Costa Rican source under Article 1 of Ley 7092. Becoming a fiscal resident does not change that.

The real bill is the Caja, the public social insurance fund, and it is not a tax. Unbroken affiliation is a condition of renewing a residency card under Articles 78 and 80 of the immigration law, Ley 8764. A retiree with no local income joins as a voluntary insured person.

Then come the local items. Income tax applies to anything generated here, including 15% on rent from a Costa Rican property. The 15% is charged on 85% of the gross rent after the fixed expense allowance, an effective 12.75%. Property tax runs at 0.25% of registered value, with a separate solidarity tax on high-value homes. Value added tax of 13% sits on what you buy.

Finally, your own country. The United States taxes its citizens on worldwide income wherever they live, and Costa Rica has no double taxation treaty with it.

The Costa Rican network is thin. Four treaties are in force, with Spain, Germany, Mexico and the United Arab Emirates.

Frequently Asked Questions

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error