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August 18, 2020

Costa Rica Corporate Taxes

Probably the great majority of foreigners living in Costa Rica never had to worry about corporate taxes in their home countries. But in Costa Rica, corporate taxes are a fact of life for many extranjeros.

It’s common in Costa Rica for foreigners to start their own companies for various reasons — to buy property, for example, or just to be able to work legally. In fact, it’s easier for most foreigners to start a company in Costa Rica than to work legally for someone else.

That means a lot of expats have to pay Costa Rica corporate taxes, even if they’re not captains of industry. And the payment is due every year by Jan. 31, or interest and penalties will be applied.

Here’s a primer on what you need to know about Costa Rica corporate taxes, known in Spanish as “impuestos a las personas jurídicas.”

Breakdown for Costa Rica corporate taxes

Even inactive companies, meaning those that are not generating any revenue, have to pay corporate taxes of about $120 a year. For active companies, tax liability is based on their revenue.

The Costa Rican government calculates annual corporate taxes based on a percentage of the monthly base salary of a government employee, referred to below as a “Base Salary.” That amount is currently 450,200 colones, or about $790.

Please note that it makes no difference how many employees your company may have, if any. Many companies are set up with just three representatives and no employees. So the base salary of a government employee is nothing but a benchmark used to measure the revenue of a company (or lack thereof).

The breakdown is as follows:

1) Inactive companies, meaning those that aren’t engaged in commerce and aren’t earning any money, pay 15% per year of that monthly Base Salary: 67,530 colones, or about $120.

2) Companies with gross revenue of less than 120 times the Base Salary (less than 54,024,000 colones, or about $94,400) pay an annual corporate tax of 25% of the Base Salary per year: 112,550 colones, or about $200.

3) Companies with gross revenue of 120 to 280 times the Base Salary (54,024,000 to 126,056,000 colones) pay an annual corporate tax of 30% of the Base Salary: 135,060 colones, or about $235.

4) Companies with gross revenue of more than 280 times the Base Salary pay an annual corporate tax of 50% of the Base Salary: 225,100 colones, or about $390.

Sound complicated? Here at Special Places of Costa Rica, we don’t write the rules. But if you have questions about paying any corporate taxes you may owe, we’re always happy to help our clients keep up with their tax obligations and avoid falling behind.

Questions? Contact us anytime at specialplaces@crvr.net.

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Category: For Expats

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