Costa Rica Cross-Border Tax Guide 2026

Costa Rica imposes withholding taxes on cross-border payments: dividends 15%, interest 15%, royalties 25%, and technical services 30%. Over 10 double tax treaties (DTTs) may reduce these rates. Transfer pricing rules follow OECD guidelines. CFC rules apply to certain foreign entities controlled by Costa Rican residents.

Withholding Tax Rates on Cross-Border Payments

Payments from Costa Rica to non-residents are subject to withholding tax at source. The rates depend on the type of payment and whether a DTT applies:

Dividends: 15% WHT to non-residents (may be reduced under DTTs)
Interest: 15% WHT on interest paid to non-residents
Royalties: 25% WHT on intellectual property royalties
Technical services: 30% WHT on technical assistance and consulting fees
Management fees: 30% WHT on management and administrative services

Double Tax Treaties (DTTs)

Costa Rica has over 10 double tax treaties in force, including with Spain, Mexico, Germany, UAE, South Korea, and others. Treaties generally reduce WHT rates on dividends (typically to 5–15%), interest (to 10–15%), and royalties (to 10–15%). To claim treaty benefits, the non-resident must provide a certificate of tax residence to the Costa Rican payer.

Transfer Pricing Rules

Costa Rica has transfer pricing legislation aligned with OECD guidelines. Transactions between related parties must be conducted at arm's length. Taxpayers must maintain transfer pricing documentation, including a local file and master file, if transaction values exceed specified thresholds. Penalties apply for non-compliance.

Controlled Foreign Corporation (CFC) Rules

Costa Rica has CFC rules (Transparencia Fiscal Internacional) that apply when a Costa Rican resident controls a foreign entity in a low-tax jurisdiction. If the foreign entity's passive income exceeds certain thresholds, that income may be attributed to the Costa Rican resident and taxed at applicable rates. CFC rules are designed to prevent tax deferral and base erosion.