Costa Rica
Corporate - Income determination
Last reviewed - 30 June 2025Inventory valuation
Inventories are generally stated at cost and can be valued using the compound average-cost method, first in first out (FIFO), retailer method, or specific identification method. Since all entities must keep legal records, any adjustment resulting from different methods of inventory valuation for tax and financial purposes should be recorded.
Capital gains
Capital gains are generally taxed at 15% on the profit realized from the sale of assets. For assets acquired before July 1st, 2019, sellers may chose to pay a flat 2.25% tax on the sale price (provided it is the first sale of the asset after such date), rather than the 15% on gains.
If the asset sold is used by the taxpayer in their ordinary trade or business, it should be treated as regular income subject to CIT.
The sale of assets owned by non-residents should be subject to a 2.5% tax which should be withhold by the buyer (if local taxpayer).
Dividend income
In the Income Tax Law, Law number 7092, dividends are taxed as income from movable capital at 15%. The distribution of dividends is exempt when the parent company is another capital company domiciled in Costa Rica, when the latter develops an economic activity subject to income tax, or in the case of a controlling company of regulated financial conglomerate.
Stock dividends
Dividends paid in the form of stock of the distributing company should be considered as exempt from taxes.
Interest income
Interest is taxed as income from movable capital at a rate of 15%, unless considered the result of the usual economic activity, in which case it would become part of the global income with a maximum ordinary rate of 30% applicable to local-source income.
It must also be considered that, as an exception, offshore-source income can be considered as taxable income for entities that belong to a multinational group if deemed as non-qualified entities; such income would be deemed as taxable with a 15% rate.
Royalty income
Royalty income coming from sources related to normal business activities is taxable.
Royalty is taxed as income from movable capital at a rate of 15%, unless considered the result of the usual economic activity, in which case it would become part of the global income with a maximum ordinary rate of 30% for non-qualified entities as an exception of territoriality, which is a tax applicable to foreign-source income.
Foreign income
Foreign-source income is not taxable in Costa Rica.
As an exception, passive incomes from foreign sources are subject to taxation, when they are generated from assets located or rights used economically outside the national territory, in cases of entities belonging to a multinational group that obtains them, also it must be considered as a non-qualified entity in accordance with the provisions of Article 1 of this Income Tax Law. In those cases, this exception is applicable for the following:
- Dividends.
- Interest.
- Royalties.
- Capital gains.
- Real estate capital income.
- Other personal capital income.