How dividend tax works in Costa Rica
Costa Rica generally treats dividends as capital income and requires the distributing company to withhold 15% when dividends or similar benefits are paid or credited. For an individual shareholder, that withholding is normally final.
A 5% withholding rate can apply to dividends distributed by a corporation whose shares are officially listed and acquired through the recognized exchange, subject to statutory conditions.
Dividends paid to another Costa Rican capital company can be exempt when the recipient carries on a qualifying economic activity and is subject to the relevant Costa Rican tax. Tax treaties can also change the result for a non-resident.
Tax rates at a glance
- Standard dividend tax
- 15%General withholding
- Qualifying listed shares
- 5%
- Active Costa Rican corporate shareholder
- No withholding
- Treaty rate
- Case-specific
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Company shareholdersFoundersHolding structuresSecurities investorsCross-border investors
Watch out for
- Dividend tax is a second layer after corporate income tax. A company can pay corporate tax on profit and then face withholding when after-tax profit is distributed.
- The 5% listed-share rate is conditional. Private-company dividends do not automatically qualify.
- A domestic intercompany exemption is not a blanket holding-company exemption. The recipient must meet the activity and tax-status conditions.
- For a foreign shareholder, the domestic 15% rate is only the starting point. A treaty and the shareholder's residence country can change the result.
Frequently asked questions
What is the dividend tax in Costa Rica?
The general dividend withholding rate is 15%. A 5% rate can apply to qualifying dividends from shares listed and acquired through a recognized exchange.
Are Costa Rican dividends taxed twice?
They can be taxed at two layers: corporate income tax on company profit and dividend withholding when after-tax profit is distributed. A qualifying domestic corporate recipient can often avoid the second layer.
Does Costa Rica withhold tax on dividends paid abroad?
Generally yes, with the domestic rate usually 15% unless an exemption or applicable tax treaty reduces it.