How corporate tax works in Costa Rica
Costa Rican companies and permanent establishments generally pay income tax on Costa Rican-source profits. The tax is calculated on taxable net income, not simply on gross turnover.
The standard corporate income-tax rate is 30%. For qualifying entities whose annual gross income does not exceed ₡119.174 million in fiscal 2026, the Ministry publishes a reduced schedule of 5%, 10%, 15% and 20% applied progressively to net income.
Corporate tax is only one layer. Operating companies may also collect 13% VAT, withhold tax on dividends or payments abroad, pay payroll charges and pay the separate annual tax on legal entities.
Corporate tax brackets in Costa Rica
| Bracket | Rate | Notes |
|---|---|---|
| First ₡5,621,000 of qualifying small-company net income | 5% | Applies when the entity meets the gross-income condition. |
| ₡5,621,000 - ₡8,433,000 of net income | 10% | Progressive rate on the excess. |
| ₡8,433,000 - ₡11,243,000 of net income | 15% | Progressive rate on the excess. |
| Over ₡11,243,000 of qualifying small-company net income | 20% | Reduced top rate for qualifying companies. |
Tax rates at a glance
- Standard corporate income tax
- 30%General rate
- 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%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Local operating companiesNearshore employersExport and service businessesRegional operatorsCosta Rican-source businesses
Watch out for
- The small-company schedule is not a blanket 5% corporate rate. It depends on qualifying under the annual gross-income ceiling, and the percentages apply progressively to net income.
- The annual legal-entity tax is separate from corporate income tax. For 2026, inactive companies are charged 15% of the salary base, while active companies use 25%, 30% or 50% bands; qualifying micro and small companies can be exempt.
- Costa Rican-source services, local management and a local permanent establishment can create tax even when the contracting party or revenue account is outside Costa Rica.
- VAT registration, electronic invoicing, monthly withholding and payroll reporting can create a heavier compliance burden than the corporate rate alone suggests.
Frequently asked questions
What is the corporate tax rate in Costa Rica?
The standard corporate income-tax rate is 30% on taxable Costa Rican-source profits. Qualifying small companies can use a progressive 5% to 20% schedule under the 2026 gross-income ceiling.
Does Costa Rica tax foreign company income?
Costa Rica is generally source-based. Foreign-source income can be outside the ordinary local base, but services performed in Costa Rica, a local permanent establishment and anti-avoidance rules can change the result.
What is Costa Rica's annual legal-entity tax?
It is a separate annual charge on many companies. The 2026 notice uses 15% to 50% of the salary base depending on status and income, with exemptions for qualifying micro and small companies.