5 Things Every Foreign Investor Should Understand About Tax Law in Costa Rica

1. Corporate tax rates: Costa Rica taxes corporate income at rates that vary depending on the size and type of business. Ensure you understand which category your business falls into.
2. VAT and sales taxes: Costa Rica has a 13% value-added tax (VAT) that applies to most goods and services. Certain sectors like tourism may have special tax rates or exemptions.
3. Tax residency status: Your tax residency determines whether you are taxed on global income or just local income. Understand the criteria for becoming a tax resident.
4. Tax incentives: Costa Rica offers tax incentives for industries like tourism, renewable energy, and technology development. Familiarize yourself with available benefits.
5. Double taxation treaties: Costa Rica has agreements with certain countries to prevent double taxation. If you are investing from abroad, check if your country has such a treaty with Costa Rica.