Costa Rica vs Panama taxes (2026): territorial tax comparison

Costa Rica vs Panama tax rates at a glance

Tax	🇨🇷 Costa Rica	🇵🇦 Panama
Income tax	Salary income tax: 0% - 25% Individual business income: 0% - 25% Employee social charges: 10.83% Employer social charges: 26.83% Tax residence indicator: 183+ days	Personal income tax: 0-25% Highest bracket tax: 25% Foreign income tax: 0% Salary withholding: Yes Employee social security: 9.75% Educational insurance: 1.25%
Corporate tax	Standard corporate income tax: 30% Small-company net-income bands: 5% / 10% / 15% / 20% Small-company gross-income ceiling: ₡119.174 million Legal-entity tax: 15% - 50% of salary base VAT: 13%	Corporate income tax: 25% CAIR minimum: 4.67% State-owned companies: 30% DMTT: 15% VAT / ITBMS: 7%
Capital gains tax	General capital gains: 15% Pre-1 July 2019 first sale option: 2.25% Non-resident withholding: 2.5% Real-estate transfer tax: 1.5%	Capital gains tax: 10% Securities WHT: 5% Real estate transfer tax: 2% Income tax advance: 3%
Dividend tax	Standard dividend tax: 15% Qualifying listed shares: 5% Active Costa Rican corporate shareholder: No withholding Treaty rate: Case-specific	Standard dividend WHT: 10% Exempt / foreign-source: 5% Bearer shares: 20% Payment deadline: 10 days
Wealth tax	Net wealth tax: 0% Municipal property tax: 0.25% Solidarity tax: 0.25% - 0.55% Financial-asset ownership tax: 0%	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0%
Inheritance / estate tax	Inheritance tax: 0% Estate tax: 0% Gift tax: 0% Municipal property tax after inheritance: 0.25%	Inheritance tax: 0% Estate tax: 0% Gift tax: 0% Probate tax: 0%
VAT / GST / sales tax	VAT: 13%	VAT / ITBMS: 7%

Who wins on each tax

Personal income taxTie

Both countries use a 25% top personal income-tax rate on relevant domestic-source income.

Corporate taxPanama

Panama's standard territorial corporate rate is 25%, below Costa Rica's 30%.

Capital gains taxPanama

Panama generally taxes capital gains at 10%, with special withholding and advance-payment rules for securities and real estate transfers; Costa Rica generally applies 15%, with a limited 2.25% transitional option for certain older assets.

Dividend taxPanama

Panama commonly withholds 10%, or 5% for certain foreign-source distributions, versus Costa Rica's usual 15%.

Territorial taxationTie

Both systems focus on local-source income: Panama taxes Panama-source income and Costa Rica taxes Costa Rican-source income, but remote-service source analysis can be decisive in either country.

The verdict

Panama wins the numbers: its personal top rate is 25%, capital gains are generally 10%, and dividend withholding is commonly 10% or 5%.

Costa Rica also works on a territorial basis but generally imposes a 30% corporate rate and 15% dividend withholding.

For a tax-led Central American move, Panama is usually the answer; Costa Rica is a lifestyle choice that needs less rate-driven justification.

How to read this comparison

Panama and Costa Rica both attract internationally mobile residents, but Panama is usually the more tax-efficient structure.

Frequently asked questions

Is Panama or Costa Rica lower tax?

Panama is generally lower on corporate, capital-gains and dividend rates, while both use territorial tax concepts.