Costa Rica Territorial Tax System

Costa Rica's core "tax regime" is not an elective program but the baseline territoriality principle in its income tax system. The general rule is that only Costa Rican-source income is subject to tax, and foreign income is typically outside the taxable base.

For individuals, this means salaries and business income sourced in Costa Rica are taxed at progressive rates up to 25%. Investment income categories commonly face flat final taxes, such as 15% on dividends and a 15% capital gains tax (with a 2.25% option under certain transitional conditions for qualifying assets).

As a practical matter, foreign income can still become complicated in edge cases. PwC notes that foreign income earned abroad while tax resident is not taxable if it is not related to the economic structure of Costa Rica, and that certain foreign-source passive income can be brought into tax under exceptional conditions for some "non-qualified" entities following 2023 reforms.

For planning, the key steps are defining tax residency (often more than 183 days), documenting source, and avoiding structures that accidentally create a Costa Rican-source nexus. Local compliance is usually straightforward, but the territorial outcome depends on facts, not labels.