Nov 9, 2025
Costa Rica’s Legislative Framework
Costa Rica’s transfer pricing framework is set forth in Law No. 10060 on the Strengthening of Public Finances and its implementing regulation, both of which are aligned with the OECD Transfer Pricing Guidelines (2022).
However, no formal Safe Harbour regime has been enacted in the country to date — although the current framework does not prohibit it. Law 10060 grants the General Directorate of Taxation (DGT) the authority to establish methods, procedures, and reporting obligations, but it has not yet developed specific mechanisms such as Safe Harbours.
Their implementation would require only a ministerial regulation issued by the Ministry of Finance, defining:
The types of transactions covered
Maximum thresholds or monetary limits
Eligibility criteria
Procedures for opting into the regime
Adopting a Safe Harbour framework would represent a natural evolution of Costa Rica’s tax system — moving from a control-oriented model toward one based on facilitation and legal certainty.
OECD Recommendation: The 5% Margin
In Chapter VII, the OECD Transfer Pricing Guidelines introduce a simplified approach for low value-adding intra-group services.
When a service is auxiliary in nature, does not involve significant intangibles or risk, it is deemed reasonable to apply a 5% mark-up on relevant costs, without the need for a detailed benchmarking analysis.
Countries such as Mexico, Colombia, and Chile have already adopted this 5% margin for administrative, accounting, IT, or back-office services.
Costa Rica could follow the same path, allowing fixed parameters for routine intra-group transactions, thus fostering predictability and easing compliance.
Who Would Benefit from a Safe Harbour Regime?
Implementing a Safe Harbour framework in Costa Rica would be especially valuable for three stakeholder groups:
SMEs and Limited-Risk Multinationals.
Many Costa Rican subsidiaries of multinational groups perform routine, low-risk functions, such as limited-risk manufacturing (maquila), back-office services (accounting, IT support), or local distribution.
For these entities, preparing a full TP study , often requiring costly external advisors and complex benchmarking , is disproportionate to their tax exposure.
A Safe Harbour would allow simplified, cost-efficient compliance while maintaining adherence to OECD standards.
Free Trade Zone Companies
Numerous companies operating under Costa Rica’s Free Trade Zone Regime engage in predictable, low-risk intercompany transactions (e.g., shared-service or cost-allocation models).
A Safe Harbour would provide legal certainty, strengthen competitiveness, and encourage new investment.
The Tax Administration Itself
For the Ministry of Finance, a Safe Harbour would be an efficiency tool — channeling low-risk operations through a simplified compliance process, freeing resources to audit complex multinational structures and high-risk base-erosion cases.
The Contrast: With and Without a Transfer Pricing Study
Without a Transfer Pricing Study (or with a deficient one)
Tax Adjustments: The Tax Authority may challenge intercompany prices and increase the taxable base.
Fines and Interest: Significant penalties apply for failure to maintain or submit TP documentation.
Double Taxation: Adjustments made in Costa Rica may not be mirrored abroad, resulting in taxation of the same income twice.
Legal Uncertainty: The constant risk of audit hinders long-term planning and discourages investment.
Defense Costs: Responding to audits or litigation involves substantial legal and consulting expenses.
Under a Safe Harbour Regime (for eligible transactions)
Legal Certainty: Compliance with Safe Harbour criteria guarantees acceptance of the applied margins.
Lower Compliance Costs: Eliminates the need for annual benchmarking and full TP documentation.
Administrative Simplicity: Streamlines the compliance process and minimizes taxpayer burden.
Fewer Disputes: Pre-approved margins greatly reduce the likelihood of tax controversies.
Investment Attraction: Positions Costa Rica as a jurisdiction with a modern, predictable, and business-friendly tax system.
The adoption of a Safe Harbour regime — particularly one aligned with the OECD’s 5% margin for low-value services — would mark an important step in Costa Rica’s fiscal modernization.
It would create a win-win scenario: greater certainty and efficiency for taxpayers, and better resource allocation for the Tax Administration.At EAS LATAM, we consider this discussion a pivotal opportunity for Costa Rica to move toward a more pragmatic, transparent, and investment-oriented tax environment.