Jan 5, 2026
General Tax Landscape in 2025
The year 2025 was marked by intense debate on tax matters in Costa Rica. The government reactivated proposals for a comprehensive tax reform, including a dual global income tax system aimed at unifying the reporting of all personal income (salaries and business activities) under a single tax.
Reform Proposals and Political Controversy
It also promoted initiatives to reduce tax exemptions (for example, applying VAT to certain airline tickets and medical supplies) and to grant the tax authority broader auditing powers, including the ability to seize assets from delinquent taxpayers without a court order, a measure that drew criticism due to potential abuses.
Although these reforms faced political resistance throughout 2025, the Executive branch brought them back to the legislative agenda during extraordinary sessions at year-end, anticipating an intense negotiation process in 2026.
Implemented Tax Measures
At the same time, some targeted changes were implemented. Since October 2023, an amendment to the Income Tax Law (Law No. 10,381) has been in force to allow Costa Rica to exit the EU list of non-cooperative tax jurisdictions. This amendment imposes a 15% tax on certain passive income earned abroad by Costa Rican companies lacking real economic substance in the country.
Additionally, the Ministry of Finance continued to apply annual inflation-based adjustments to income tax brackets.
Outlook for 2026
Looking ahead to 2026, Costa Rica will need to determine whether it moves forward with the global income tax reform and other structural tax measures, within a pre-election environment that may complicate their approval.