Costa Rica

Individual - Taxes on personal income

Last reviewed - 20 December 2019

Income taxes on individuals in Costa Rica are levied on local income irrespective of nationality and resident status.

For individuals domiciled in Costa Rica, any income obtained within the boundaries of Costa Rica is considered as Costa Rican-source income and is taxable. Costa Rican-source income is understood to be any income derived from assets used, goods located, or services rendered within Costa Rican territory.

Non-residents are liable only for the applicable withholding taxes (WHTs), depending on the nature of the local income.

Personal income tax rates

Self-employed individuals

Tax rates for self-employed individuals for tax year 2019, based on annual taxable income, are as follows:

Annual taxable income (CRC*) Tax on excess (%)
Over Not over
0 3,732,000 0
3,732,000 5,573,000 10
5,573,000 9,296,000 15
9,296,000 18,631,000 20
18,631,000 25

* Costa Rican colones

Employed individuals

Tax rates for employed individuals, based on monthly salary, are shown in the table below. Individuals who are both self-employed and employees may not take the full CRC 3,549,000 deduction. Instead, they will only be able to take advantage of the spread of this amount and the resulting amounts from the exempt brackets of income from personal dependent work services.

Monthly taxable income (CRC) Tax on excess (%)
Over Not over
0 840,000 0
840,000 1,233,000 10
1,233,000 2,163,000 15
2,163,000 4,325,000 20
4,325,000   25

Note that the income tax brackets for self-employed and salaried employees are adjusted on a yearly basis.

Withholding tax (WHT) rates

Income WHT (%)
Interest 15
Dividends 15
Directors’ fees, etc. 15
Salaries to non-residents 10
Professional Fees 25
Other 5.5 to 30

Local income taxes

None of the provinces or municipalities impose any income taxes on individuals within their jurisdiction.