Costa Rica

Overview

Last reviewed - 20 December 2019

Costa Rica, a country in Central America, is bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west, and the Caribbean Sea to the east. It became an independent and sovereign Republic in 1821. Costa Rica is divided into seven provinces, with San José as its capital. The official language of Costa Rica is Spanish, and the currency is the colón (CRC).

Although it still maintains a large agricultural sector, Costa Rica has expanded its economy to include strong technology and tourism industries. The standard of living is relatively high, and land ownership is widespread. Prior to the global economic downturn, Costa Rica enjoyed stable economic growth. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialised agricultural products have broadened export trade in recent years. High value-added goods and services, including microchips, have further bolstered exports. Tourism continues to bring in foreign currency, as Costa Rica's impressive bio-diversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the fiscal incentives offered in the free-trade zones. 

Over the last 25 years, Costa Rica has experienced sustained economic growth as a result of an externally oriented growth strategy based on openness to foreign investment and gradual trade liberalisation.

Costa Rica has also been considered a benchmark worldwide in terms of environmental policies and achievements, as well as in the conservation of forests and biodiversity.

Currently, Costa Rica has one of the lowest poverty rates in Latin America and the Caribbean. According to data from the National Institute of Statistics and Census, although there has not been a reduction in the percentage of poor households in Costa Rica, the variation does not represent a significant change (it went from 20.5% to 20% between 2016 and 2017, and to a 21.10% in 2018), and the level of extreme poverty has not increased (6.3%).

Costa Rica is also characterised by its high indicators of human development, which place it in a ranking of prevalence with respect to the other countries of the region. Under the model of a social state, our country provides the population with different services, such as free education at all levels, security, and a universal health system.

The per capita income in Costa Rica for the year 2000 was 3,808.36 United States dollars (USD) and has grown to 11,630.67 in 2017, showing an overall increase over the other countries of the region, besides Panama, which shows similar stats.

Although the country had one of the highest average real growth rates in Latin America between 2010 and 2016 (4% versus 2.5% regional average), growth has weakened in recent years.

The main challenges facing the country at present are the fiscal deficit and the reduction of poverty. 

Recently, the country carried out a fiscal reform of relevance that establishes a tax on added value and capital gains, and creates a fiscal rule that would limit the growth of the current government expenditure, among others. The country also established measures to rationalise the expenses charged to the public treasury and for the evaluation and monitoring of public policies. This tax reform is intended to obtain fresh revenues that will reduce the fiscal deficit in the short or medium term.

PwC InterAmericas is a regional entity comprised of seven firms: PwC Guatemala, PwC El Salvador, PwC Honduras, PwC Nicaragua, PwC Costa Rica, PwC Panama, and PwC Dominican Republic. Together, we have over 1,000 professionals ready to provide our clients with audit, tax, legal, and consulting services. InterAmericas firms are backed by over 50 years of experience rendering a high standard of professional services to the private sector, public sector, and non-profits. PwC Costa Rica supports clients with the local knowledge and skills of its people and with access to a broad range of other professionals across the PwC global network of firms.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

30

Corporate income tax (CIT) due dates
CIT return due date

It varies according to fiscal year end, but it should be on 15 March.

CIT final payment due date

15 March

CIT estimated payment due dates

It should be taken into account that the date of payment for instalments for the fiscal period 2020 may vary considering the recent reform in the law, which changed the fiscal year from 1 October to 30 September to match the calendar year; for that reason, the Regulation to the Law of the Income Tax establishes transitory regulations that establish regulations for different assumptions.

Personal income tax (PIT) rates
Headline PIT rate (%)

Self-employed: 25; Employed: 25

Personal income tax (PIT) due dates
PIT return due date

NA

PIT final payment due date

NA

PIT estimated payment due dates

Monthly for employees.

Quarterly for self-employed individuals.

Value-added tax (VAT) rates
Standard VAT rate (%)

13

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: 15 / 15 / 25;

Non-resident: 15 / 5.5 or 15 / 25

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

15

Individual capital gains tax rate (%)

15

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Inheritance tax rate (%)

NA

Gift tax rate (%)

NA

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.