Country topic
Tax in Costa Rica
Costa Rica's income tax applies to Costa Rican-source income. Article 1 of the Income Tax Law defines it as income generated in the national territory, from services provided, goods located, capital invested and rights used there, whatever the nationality, domicile or residence of the people involved. [T1] Digital nomad stay holders are exempt from Costa Rican income tax: the law says they are never treated as tax resident and their income from abroad is not Costa Rican-source. EY's summary of the regulation says the exemption does not pass automatically to family members. Outside that status, whether remote work done from Costa Rica for a foreign payer is taxable is a question for a Costa Rican adviser. [T2] [T3]
What we found
The research, with its sources.
Research information, not advice. Rules change, so check the source before you act on one.
- Costa Rica's income tax applies to Costa Rican-source income. Article 1 of the Income Tax Law defines it as income generated in the national territory, from services provided, goods located, capital invested and rights used there, whatever the nationality, domicile or residence of the people involved. [T1]
- Digital nomad stay holders are exempt from Costa Rican income tax: the law says they are never treated as tax resident and their income from abroad is not Costa Rican-source. EY's summary of the regulation says the exemption does not pass automatically to family members. Outside that status, whether remote work done from Costa Rica for a foreign payer is taxable is a question for a Costa Rican adviser. [T2] [T3]
- You are treated as domiciled in Costa Rica if you spend more than 183 days in the fiscal period, continuous or not, counting arrival and departure days (Income Tax Regulation, article 10). A trip abroad of up to 30 continuous calendar days counts as days in Costa Rica unless you prove tax residence elsewhere with a certificate; a longer absence does not count. [T4]
- For 2026, individuals with lucrative activities pay 0% on taxable income up to CRC 6,244,000 a year, then 10%, 15% and 20% in bands, and 25% above CRC 20,872,000 (Decree 45333-H, as summarised by EY; the decree itself was not read). The bands are updated every January. [T5]
- Law 10381, in force since October 2023, taxes foreign-source passive income (dividends, interest, royalties, capital gains and property or other capital income) only when it is received by an entity belonging to a multinational group that lacks enough economic substance in Costa Rica. The law's wording covers entities, not individuals. [T6] [T1] [T7] [T8]
- Two bills filed in 2026 would go further, and neither is law. News reports say bill 25.796, filed by the government and reported on 23 September, would make residents, individuals included, taxpayers on foreign passive income, with foreign tax paid deducted (the reports give no rate). Bill 25.734, filed by the Frente Amplio on 20 August, would tax income with an economic link to Costa Rica; the report does not say whether it reaches individuals. Check the Legislative Assembly's site for their status. [T7] [T9] [T10]
- Costa Rica has no income tax treaty with the United States, Canada, Australia or New Zealand, so none settles a double claim. Canada (in force 14 August 2012) and Australia (4 February 2013) have tax information exchange agreements with Costa Rica, not treaties. Costa Rica is also not on the US, Canadian, Australian or New Zealand social security agreement lists. [T11] [T12] [T13] [T14] [T15] [T16] [T17] [T18] [T19] [T20]
- Your home country may keep its claim. US citizens abroad generally file on worldwide income; the 2026 foreign earned income exclusion is up to $132,900, the physical presence test needs 330 full days abroad within 12 months, and foreign accounts together over $10,000 go on an FBAR. Canada, Australia and New Zealand look at residential ties, so a year away does not by itself end residence. [T21] [T22] [T23] [T24] [T25] [T26] [T27]
The country
More on Costa Rica.
Topics
More about Costa Rica.
Questions about Tax in Costa Rica.
Do I pay Costa Rican tax if I work remotely for a foreign employer?
Costa Rica taxes Costa Rican-source income. Digital nomad stay holders are exempt: the law says they are never treated as tax resident and their income from abroad is not Costa Rican-source. Outside that status, ask a Costa Rican adviser before you arrive. This is not tax advice.
How many days before I become a tax resident of Costa Rica?
More than 183 days in the fiscal period, continuous or not, counting arrival and departure days. A trip abroad of up to 30 continuous calendar days still counts as days in Costa Rica unless you prove tax residence elsewhere with a certificate. Tax residence is separate from your visa.
Is foreign income, such as a pension or investments, taxed in Costa Rica?
Today Costa Rica taxes foreign passive income only when received by entities in multinational groups (Law 10381); the wording covers entities, not individuals. Bills 25.796 and 25.734, filed in 2026, would go further but are not law. How a pension is treated is not covered here.
What are the income tax rates in Costa Rica?
For 2026, individuals with lucrative activities pay 0% up to CRC 6,244,000 of taxable income a year, then 10%, 15% and 20% in bands, and 25% above CRC 20,872,000 (EY's summary of Decree 45333-H). The bands are updated every January, and what you owe depends on your situation.
Do I still owe tax at home if I live in Costa Rica?
It depends on your passport and ties. US citizens generally file on worldwide income wherever they live; the 2026 foreign earned income exclusion is up to $132,900. Canada, Australia and New Zealand look at residential ties, not days alone. None has an income tax treaty with Costa Rica.
Sources
Where each figure comes from.
Every figure on this page links to the page we read, with the date we checked it.
- [T1] Income Tax Law (Law 7092), articles 1 and 15, Procuraduría General de la República, SINALEVI (official legislation database). Checked 15 October 2026.
- [T2] Law 10008: attracting international remote workers and service providers (digital nomads), Procuraduría General de la República, SINALEVI (official legislation database). Checked 15 October 2026.
- [T3] Authorities publish the regulation to the Digital Nomads Law (Decree 43619-H-MGP-TUR), EY Costa Rica (tax advisers, not official). Checked 11 October 2026.
- [T4] Income Tax Regulation (Decree 43198-H), article 10: who counts as domiciled, Procuraduría General de la República, SINALEVI (official legislation database). Checked 15 October 2026.
- [T5] Ministry of Finance set the income tax bands for fiscal year 2026 (Decree 45333-H), EY Costa Rica (tax advisers, not official). Checked 15 October 2026.
- [T6] Law 10381: reform of the Income Tax Law (Law 7092) to exit the EU list of non-cooperative jurisdictions, Bufete de Costa Rica (private law firm's copy of the law text, not official). Checked 11 October 2026.
- [T7] Gobierno presenta dos proyectos para gravar rentas del exterior y recortar exoneraciones, Delfino.cr (news site, not official). Checked 15 October 2026.
- [T8] Costa Rican Congress approves bill to counter exclusion from the EU list of non-cooperative jurisdictions, EY Global (private adviser, not official). Checked 11 October 2026.
- [T9] Frente Amplio propone restablecer cobro general sobre rentas pasivas obtenidas en el extranjero, Delfino.cr (news site, not official). Checked 15 October 2026.
- [T10] Costa Rica tax residency and the 183-day rule, explained, The Rio Times (news site, not official). Checked 11 October 2026.
- [T11] United States income tax treaties, A to Z, Internal Revenue Service. Checked 10 October 2026.
- [T12] Tax treaties in force, Department of Finance Canada. Checked 10 October 2026.
- [T13] Entry into force of the tax information exchange agreement between Canada and Costa Rica, Department of Finance Canada. Checked 10 October 2026.
- [T14] Income tax treaties in force, Australian Treasury. Checked 11 October 2026.
- [T15] Tax information exchange agreements, Australian Treasury. Checked 11 October 2026.
- [T16] Tax treaties: double tax agreements and tax information exchange agreements, Inland Revenue (New Zealand), Tax Policy. Checked 11 October 2026.
- [T17] US international Social Security agreements, US Social Security Administration. Checked 10 October 2026.
- [T18] Social security agreements, Government of Canada. Checked 10 October 2026.
- [T19] International social security agreements, Australian Government, Department of Social Services (Internet Archive copy). Checked 11 October 2026.
- [T20] Social security agreements, Work and Income (Ministry of Social Development, New Zealand). Checked 11 October 2026.
- [T21] US citizens and residents abroad: filing requirements, Internal Revenue Service. Checked 10 October 2026.
- [T22] Figuring the foreign earned income exclusion, Internal Revenue Service. Checked 10 October 2026.
- [T23] Foreign earned income exclusion: physical presence test, Internal Revenue Service. Checked 10 October 2026.
- [T24] Report of Foreign Bank and Financial Accounts (FBAR), Financial Crimes Enforcement Network (FinCEN). Checked 10 October 2026.
- [T25] Determining your residency status, Canada Revenue Agency. Checked 10 October 2026.
- [T26] Australian resident for tax purposes, Australian Taxation Office (Internet Archive copy). Checked 11 October 2026.
- [T27] Tax residency status for individuals, Inland Revenue (New Zealand). Checked 11 October 2026.