Taxes
Costa Rica — Tax: Corporate Tax
Costa Rica's corporate income tax is progressive, not a flat 25% as the AI draft speculated. For 2026, companies with gross annual income up to ₡119,174,000 (roughly $235,000) use a staggered scale: 5% on the first ~₡5,621,000 of net income, rising to 20% on net income above ~₡11,243,000. Companies with gross income above that ₡119,174,000 threshold pay a flat 30% on net income. This is a territorial system — only Costa Rican-sourced business income is taxed.
Why this matters
The AI draft's speculative '25%' rate was wrong on both counts — Costa Rica's actual top corporate rate is 30% (not 25%), and small/medium companies below the gross-income threshold get meaningfully lower progressive rates (starting at 5%), which matters a great deal for anyone planning to incorporate a small business in Costa Rica versus a larger operation.
Key facts
- Companies with gross annual income up to ₡119,174,000 (2026 threshold, roughly $235,000) use a progressive scale on net income: 5% on the first ~₡5,621,000, then higher bands up to 20% on net income above ~₡11,243,000.
- Companies with gross annual income exceeding ₡119,174,000 pay a flat 30% rate on net income.
- Corporate tax brackets and thresholds are updated annually by the Ministry of Finance (Executive Decree), so exact colón figures shift slightly year to year with inflation.
- Costa Rica's corporate tax is territorial — only income sourced within Costa Rica is taxed; foreign-sourced corporate income is generally exempt.
- All companies operating in Costa Rica, including branches/subsidiaries of foreign companies, must register for a taxpayer ID with the Dirección General de Tributación (DGT) and file annual corporate tax returns.
Steps
- Determine your company's gross income tier — Check whether projected gross annual income falls under or over the ~₡119,174,000 (2026) threshold, since this determines whether the progressive small-company scale or the flat 30% rate applies.
- Register with the Dirección General de Tributación (DGT) — Obtain a corporate taxpayer ID and register the company for tax purposes before commencing operations.
- File annual corporate tax returns — File the corporate income tax return annually based on the fiscal period, applying the correct progressive or flat rate to net taxable income.
Required documents
- Corporate registration documents (Costa Rican sociedad anónima or equivalent)
- Taxpayer ID (cédula jurídica) from the DGT
- Annual financial statements/accounting records
Common mistakes
- Assuming a flat 25% corporate tax rate — the actual top rate is 30%, with a progressive scale starting at 5% for smaller companies below the gross-income threshold
- Not checking the annually-updated gross-income threshold that determines which rate scale applies
- Assuming foreign-sourced corporate income is taxed the same as Costa Rican-sourced income under the territorial system