Taxation of Non-Residents in Costa Rica: Filing Obligations

Published on March 11, 2026 and written by Cyril Jarnias

In an increasingly globalized world, the issue of taxation for non-residents is becoming crucial, and Costa Rica is no exception to this trend. As this country attracts a growing number of foreign investors and retirees, understanding the specific reporting obligations they face is essential to avoid tax pitfalls and potential penalties.

This article guides you through the complex nuances of the Costa Rican tax system for non-residents, explaining the rights and responsibilities of each individual in this tropical paradise. From income tax returns to taxes on real estate, discover how to effectively navigate this legislative maze so you can focus on what matters most: enjoying your stay in Costa Rica.

Understanding Non-Resident Tax in Costa Rica

Criteria for Non-Resident Tax Status in Costa Rica

• Any person who does not spend more than 183 days (consecutive or not) on Costa Rican territory during a fiscal year is considered a non-resident for tax purposes.
• Immigration or legal residency status has no direct impact: only the number of days spent in the country counts.
• If you do not meet this criterion and cannot prove tax residency elsewhere, you are considered a non-resident.

Types of Taxable Income for Non-Residents

Non-residents are only subject to tax on income from Costa Rican sources, including:

• Rental income from property located in Costa Rica
• Professional income generated by activities carried out locally
• Dividends and interest paid by Costa Rican companies
• Profits earned through locally domiciled businesses

Applicable Tax Rates for Non-Residents

Type of Income	Tax Rate
Rental Income	15%
Professional Fees	25%
Dividends	15%
Interest	15%
Commercial Gains (Services)	25%

These rates are applied as withholding tax, typically performed by the Costa Rican paying entity or individual.

Possible Exemptions

• Certain incomes may be exempt under international agreements to avoid double taxation (if applicable).
• Small amounts may sometimes benefit from a minimum exemption, but this remains rare for non-residents.

Reporting Obligations for Non-Residents

1. Mandatory annual declaration if the income was not fully subject to withholding tax at source.
2. Retention of documentation related to payments and tax withholdings made locally.
3. Possible acquisition of a tax identification number (“NITE”) from the local authorities.

Concrete Examples

Rental Income

A French owner rents out their apartment located in San José. The rent received is taxable at the flat rate, often deducted directly by the local real estate agency before the balance is paid to the foreign owner.

Professional Income

A consultant based in Europe carries out a one-off assignment for a Costa Rican company. The local company applies a tax withholding on their fees before payment.

Practical Tips

• Always request an official statement detailing the gross amounts received and the tax withholdings made.
• Annually verify your resident/non-resident status to avoid any confusion during a tax audit.
• Consult a tax advisor specialized in Costa Rican law if your local income becomes significant or regular.

Compliance with these rules is essential: any failure can result in significant financial penalties.

The Double Taxation Framework in Costa Rica

The concept of double taxation refers to the situation where the same income is taxed by two separate tax jurisdictions, typically the country of residence and the country of the income source.

International Framework and Measures in Costa Rica

• Costa Rica applies a territorial tax regime: only income from Costa Rican sources is generally taxed.
• To prevent double taxation, Costa Rica has signed bilateral tax treaties (DTT/DTAA) with several countries, adopting OECD standards and incorporating certain provisions of the Multilateral Instrument (MLI).
• The treaties provide mechanisms such as exemption or reduction of withholding tax rates for certain types of income (dividends, interest, royalties, etc.).

Examples of Bilateral Tax Treaties Signed by Costa Rica

Partner Country	Date of Signature	Specifics
Germany	In force	Partial MLI application
Spain	In force	Partial MLI application
Mexico	In force	Partial MLI application
United Arab Emirates	In force	Application outside MLI

Obligations of Non-Residents Regarding Tax Reporting and Payment

• Non-residents receiving income from Costa Rican sources (interest, dividends, fees, etc.) are subject to withholding tax at source.
• The withholding rate varies depending on the nature of the income, unless the applicable treaty provides for a reduced rate or an exemption.
• Obligation for the Costa Rican payer to withhold and remit the withholding tax to the tax administration.
• Non-residents are not required to file an income tax return in Costa Rica for this income, except in specific cases (e.g., existence of a permanent establishment).

Impact of Treaties on the Tax Obligations of Non-Residents

Tax treaties allow:

• Limiting or eliminating double taxation through the reduction of withholding tax at source.
• Granting a tax credit or exemption in the country of residence for tax paid in Costa Rica.

Reporting obligations can be eased if the treaty provides a procedure for certifying tax residency or an attestation to benefit from the reduced rate.

Alternatives for Effective Tax Management

• Verify eligibility for the benefits of a tax treaty before any cross-border operation.
• Structure international income flows to maximize the advantages of treaties.
• Systematically document tax residency and retain the required certificates to justify the application of preferential rates.
• Use international tax planning, in collaboration with specialized advisors, to avoid risks of double taxation not covered by a treaty.

Example of Management Flow:

1. Identify if the beneficiary’s country of residence has a treaty with Costa Rica.
2. Apply the withholding tax provided for by the treaty.
3. Provide the required documents to benefit from the reduced rate.
4. Request, if applicable, a tax credit or exemption in the country of residence.

Note:
The absence of a tax treaty exposes one to double taxation, unless the country of residence unilaterally provides a tax credit for tax paid in Costa Rica.

Reporting Obligations for Non-Resident Expatriates

Reporting Obligations of Non-Resident Expatriates in Costa Rica

Types of Income to Declare:

• Income from Costa Rican sources:
• Rent from real estate located in Costa Rica
• Income from commercial or professional activities carried out in the territory
• Capital gains from the sale of assets located in Costa Rica
• Dividends and interest from Costa Rican companies
• Income from foreign sources:
• Not taxable in Costa Rica for non-residents, except for specific exceptions provided by legislation or tax treaties

Main Reporting Obligations:

• Mandatory annual declaration if receiving Costa Rican income
• Obtaining a local taxpayer number (tax identification number)
• Payment of local (municipal) and national (tax administration) taxes
• Retention of documentation related to transactions and transfers
• Application of withholding tax at source on certain income for non-residents

Specific Forms and Documents:

Obligation	Required Form or Document
Income Tax Return	Form D-101 (Income Tax Declaration)
Obtaining Tax ID Number	Form D-140 (Taxpayer Registration)
Payment of Property Taxes	Municipal receipts
Proof of Income	Bank statements, rental contracts, certificates
Withholding at Source	Withholding certificate provided by the Costa Rican payer

Tax Deadlines:

• Fiscal Year End: December 31
• Declaration Deadline: Generally March 15 of the following year for income tax
• Tax Payment: To be made at the time of declaration or according to a schedule defined by the administration

Penalties for Non-Compliance:

• Fines for late filing or omission of declaration
• Surcharge on taxes due (late payment penalties and interest)
• Blocking of bank accounts or seizure of assets in case of serious non-compliance
• Exclusion from certain administrative rights (property registration, permit renewal, etc.)

Specific Rights and Exemptions:

• Exemptions provided by tax treaties signed between Costa Rica and certain countries (e.g., Spain, Germany)
• Application of final withholding tax for certain income, avoiding double taxation
• Possibility of exemption or reduced rate on certain income depending on its nature and source

Practical Tips to Facilitate Tax Filing:

• Always seek advice from a local tax advisor specialized in Costa Rican tax law
• Keep all proof of income and tax payments
• Check for the existence of a double taxation treaty between your country of residence and Costa Rica
• Ensure timely registration with the Costa Rican tax administration
• Use accounting software or services adapted to Costa Rican legislation

Rigorously respecting reporting obligations helps avoid costly penalties and secures your tax rights in Costa Rica.