Costa Rica Taxes for Expats: What You Actually Pay in 2026

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What Costa Rica Taxes, and What It Does Not

Costa Rica taxes for expats start with one rule that shapes everything else. Under Ley 7092, the income tax law of 21 April 1988, only Costa Rican-source income is taxed.

Income counts as Costa Rican-source when it comes from assets used, goods located or services rendered inside the country. Nationality and immigration status do not change that test.

A foreign pension, dividends from foreign shares or rent from a house abroad therefore sit outside the local base. So does a wage paid by a foreign employer for work done abroad.

What matters is where the work happens, not where the client sits. Services performed in Costa Rica can be Costa Rican-source even when the invoice goes overseas.

Tax Residency and the 183-Day Rule

Article 10 of Decreto 43198-H makes you a tax resident after more than 183 days in the country. Those days are counted over the twelve months before the tax is settled.

The days need not run consecutively, and a trip abroad of 30 calendar days or fewer does not break the count. Proof of tax residence in another country can rebut the test.

Residency decides how you are taxed rather than what is taxed. Residents file an annual return, while non-residents are generally taxed by withholding at source.

The 2026 Income Tax Bands

Decreto Ejecutivo 45333-H set the 2026 thresholds and was published in La Gaceta 229 on 5 December 2025. Consumer prices fell 0.38 percent, so the bands moved down rather than up.

Figures below use a reference selling rate of 451.86 colones to the US dollar. The Banco Central de Costa Rica sets it, and the Ministerio de Hacienda published it on 23 September 2026.

Monthly salary up to ₡918,000 (about US$2,032) is exempt. The next slice, up to ₡1,347,000 (about US$2,981), is taxed at 10 percent.

The excess to ₡2,364,000 (about US$5,232) is taxed at 15 percent, and the slice to ₡4,727,000 (about US$10,461) at 20 percent. Earnings above that are taxed at 25 percent.

Employees deduct a credit of ₡1,710 a month for each child (about US$3.78) and ₡2,590 a month for a spouse (about US$5.73).

The self-employed are taxed on annual profit instead. Nothing is due up to ₡6,244,000 (about US$13,818), then 10 percent applies to ₡8,329,000 (about US$18,433).

The rate is 15 percent to ₡10,414,000 (about US$23,047) and 20 percent to ₡20,872,000 (about US$46,191). Profit above that is taxed at 25 percent.

Companies pay 30 percent on profit. Those with gross income under ₡119,174,000 (about US$263,741) pay reduced bands of 5 to 20 percent.

Foreign Income: The 2023 Reform and a New Bill

Territorial does not mean untouchable. Ley 10381, published in La Gaceta 180 on 2 October 2023, carved an exception into Ley 7092.

It lets Costa Rica tax foreign passive income, meaning dividends, interest, royalties, rents and capital gains. The charge falls on a multinational group’s local company that lacks adequate economic substance.

Costa Rica passed that law to get off the European Union list of non-cooperative jurisdictions, which it managed in February 2025. A credit is allowed for an equivalent tax paid abroad.

On Tuesday 22 September 2026 the government went further and filed expediente 25.796. It would tax residents at a general 15 percent on foreign interest, dividends, royalties, rents and capital gains.

Víctor Julio Carvajal, the vice-minister of revenue, presented the measure. It would drop the economic-substance test and reach individuals, companies, trusts and investment funds.

A credit for equivalent tax paid or withheld abroad would survive. The text has gone to the legislature’s finance committee, and it is a bill rather than a law.

Value-Added Tax at 13 Percent

Ley 9635, the public finance law of 4 December 2018, created a value-added tax. It replaced the old sales tax on 1 July 2019, at a general rate of 13 percent under article 10.

Article 11 sets reduced rates of 4 percent on air tickets and some private health services. Medicines, private education and personal insurance premiums are taxed at 2 percent.

Basic-basket goods carry 1 percent. Residential rent is exempt where the monthly rent is 1.5 salarios base or less, which is ₡693,300 in 2026 (about US$1,534).

Property, Transfer and Company Charges

Municipalities levy an annual property tax of 0.25 percent under Ley 7509. It is charged on the value registered with the municipality, which owners must keep current.

Selling costs more. A transfer tax of 1.5 percent applies to the sale price or the registered value, whichever is higher.

It also catches an indirect sale, where shares in a property-holding company change hands. Many foreign buyers hold land through a Costa Rican company, so this one bites.

Every company owes an annual legal-entity tax under Ley 9428, due on 31 January. An inactive company paid ₡69,330 for 2026 (about US$153).

An active company paid ₡115,550 (about US$256), ₡138,660 (about US$307) or ₡231,100 (about US$511), by gross income band. Three consecutive unpaid years can dissolve the company.

The education and culture stamp under Ley 5923 falls due on 31 March. It runs from ₡5,000 to ₡18,000 on net capital (about US$11 to US$40).

Caja Contributions: The De Facto Tax

Most residency categories oblige you to join the Caja Costarricense de Seguro Social, the public health and pension system. For many foreign residents it costs more than income tax.

The self-employed and the voluntarily insured pay on a five-band scale. It runs from 7.05 percent to 19.11 percent of an income the Caja assesses, rather than one you declare.

The salaried payroll deduction is a different figure, and it rose from 10.67 to 10.83 percent in January 2026. Non-salaried residents pay on the band scale instead.

The Caja’s minimum monthly contribution base for health cover rose to ₡346,789 in January 2026 (about US$767). Decreto 45303-MTSS set it.

Filing, Deadlines and TRIBU-CR

The ordinary fiscal period is the calendar year. The annual return and the payment both fall due on 15 March.

Article 10 of the Código de Normas y Procedimientos Tributarios pushes a deadline on a non-working day to the next working day. The 2025 return therefore fell due on Monday 16 March 2026.

Individuals with a lucrative activity file form D-101, and companies file form D-102. Inactive companies file form 272 between 1 January and 30 April.

Since 6 October 2025 all of this happens on TRIBU-CR, the platform that replaced the older ATV system. Partial payments fall due in June, September and December.

Landlords are taxed separately at 15 percent on rent, after a flat 15 percent deduction. That is an effective 12.75 percent of gross rent, declared monthly on form D-125.

Treaties, Americans and Digital Nomads

Costa Rica has four comprehensive double-taxation treaties in force, with Spain, Germany, Mexico and the United Arab Emirates. There is none with the United States.

That matters less than it sounds for Americans. Costa Rica does not tax a resident’s US pension, Social Security, retirement withdrawals or investment income.

Those earnings remain taxable in the United States, which taxes its citizens wherever they live.

Remote workers admitted under Ley 10008 of 11 August 2021 are a separate case. Decreto 43619 exempts them from the profits tax and says they are not tax residents while the permit lasts.

The scheme asks for foreign income of US$3,000 a month, or US$4,000 for an applicant bringing dependants. That exemption covers the holder alone, not the family.

Sources: Ley 7092; Ley 9635, in Alcance 202 to La Gaceta of 4 December 2018; Ley 10381; Ley 9428; Ley 7509; Ley 5923; Decreto Ejecutivo 45333-H; Decreto 43198-H; Decreto 43619; Decreto 45303-MTSS; Ministerio de Hacienda; Banco Central de Costa Rica; Caja Costarricense de Seguro Social; Imprenta Nacional; Delfino.cr; CRHoy; Monumental; PwC; EY; BDO Costa Rica

More: Costa Rica news in English, every day from The Rio Times.

Frequently Asked Questions

Does Costa Rica tax my foreign income?

Generally no, because Ley 7092 taxes only Costa Rican-source income. The exception is Ley 10381, which since 2023 has reached foreign passive income of substance-less group companies.

What does the 183-day rule actually do?

It makes you a tax resident once you pass 183 days in the country. Article 10 of Decreto 43198-H counts those days over the previous twelve months, not the calendar year.

What would the new bill on foreign income change?

Expediente 25.796, filed on 22 September 2026, would tax residents at 15 percent on foreign interest, dividends, royalties, rents and capital gains. It is a bill, not a law.

What do residents actually pay each month?

Caja contributions usually weigh most, from 7.05 to 19.11 percent of an assessed income for the self-employed. Local earnings are then taxed in the 2026 bands on top.

Do I need a Costa Rican accountant?

If you have Costa Rican-source income, a company, or a property you let, yes. Costa Rica taxes for expats turn on the source test, and that is where foreigners most often go wrong.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief