Foreign tax credit
Costa Rica’s tax system does not allow for the possibility of foreign tax credits.
Entities covered by the Free Trade Zone Law may enjoy exemption from import duties on goods, income tax, VAT, export tax, selective consumption tax, real estate transfer tax, and WHT on payments abroad, as well as the discretionary use of foreign currency generated abroad. However, due to rules established by the World Trade Organisation (WTO) in force from year 2015, the manufacturing companies can apply to the Free Trade Zone Regime whether the sale of their products is in Costa Rica or outside Costa Rica as long as they comply with the requisites established in the Law. This same rule was extended by means of the PL 9689/2019 to the service companies, under which they can sell their services internally or abroad without any cap or restrictions. Right now, there are proposed regulations under discussion to implement the new rules brought by the PL 9689/2019.
Special benefits exist for industries that import semi-manufactured materials for assembly in Costa Rica and export finished products. Benefits consist of duty-free imports of raw materials for subsequent export as manufactured products. Machinery for these industries may also be imported duty-free.