Apr 29, 2026
By: Gabriela Paez
The general rule in Costa Rica is that capital gains are taxed at 15%. However, the Income Tax Law allows taxpayers to opt for a 2.25% rate on the sale price when it is the first sale of goods or rights acquired before the entry into force of the capital gains regime. In practice, this means that the full business sale may contain, within a single transaction, components subject to 2.25% and others subject to 15%.
Here is the most important technical precision: the fact of selling the entire business does not automatically convert the whole price into a base for the 2.25% rate. The Tax Administration requires the identification of the assets and rights included in the transaction, the establishment of their transfer value and a review of their acquisition date. Only goods or rights acquired before July 1, 2019, and which also meet the legal condition of being a first sale, may opt for the 2.25% rate on their sale price. Assets or rights acquired after that date, on the other hand, must be taxed at 15% on the gain, that is, on the difference between their transfer value and their tax cost.
In other words, although legally it may be a single full business sale, for tax purposes the calculation requires a disaggregated reading. The contract may establish a global price for the business, but for tax purposes that amount must be reasonably allocated among the different assets and rights transferred. Otherwise, the seller is exposed to a poorly supported tax settlement, especially if it intends to defend that the entire transaction was covered by the 2.25% rate.
Example of the calculation in a full business sale
Assume that a company sells 100% of its commercial establishment for a total price of CRC 2,000,000,000. The transaction comprises the entire business and the contract includes a technical allocation of the transfer value of the assets and rights transferred, so that the tax calculation can be performed with traceability.
Component transferred | Acquisition date | Transfer value | Tax base | Tax |
Operating land and building | 2014 | CRC 900,000,000 | 2.25% on the price | CRC 20,250,000 |
Furniture and equipment | 2017 | CRC 250,000,000 | 2.25% on the price | CRC 5,625,000 |
Management software | 2021 | CRC 110,000,000 | 15% on a gain of CRC 50,000,000 | CRC 7,500,000 |
Acquired trademark | 2022 | CRC 220,000,000 | 15% on a gain of CRC 120,000,000 | CRC 18,000,000 |
Transferable operating license | 2024 | CRC 70,000,000 | 15% on a gain of CRC 40,000,000 | CRC 6,000,000 |
In this example, the sale continues to be a full business sale. However, the tax is not determined on the global price of CRC 2,000,000,000 with a single rate. The components acquired before July 1, 2019 that qualify for the first sale total CRC 1,150,000,000 and generate a tax of CRC 25,875,000 at 2.25%. The components acquired after that date generate a tax of CRC 31,500,000, calculated at 15% on the respective gain. The total tax in the example therefore amounts to CRC 57,375,000.
The practical lesson is clear: the transaction may be total from a commercial standpoint, but the tax calculation still requires a technical separation by asset or right. Therefore, when negotiating the sale of an entire business, it is not enough to agree on the enterprise value or the total purchase price. A matrix allocating the transfer value is also needed, as well as the tax cost of each relevant component and sufficient documentary support to sustain why one part of the transaction is settled at 2.25% and another at 15%.
In Conclusion
The recent ruling on full business sale did not open the door to asserting that every business sold is taxed at 2.25%. What it did was recognize that the integral sale of the commercial establishment can be analyzed under the capital gains regime. From there, the technical work consists of correctly calculating which part of the transaction may opt for the special rate and which part must remain under the general rate.
In summary, when the entire business is sold, the correct question is not whether the entire transaction falls under 2.25% or 15%, but how the transfer price is distributed among assets and rights with different tax histories. That is where the contingency or the tax robustness of the transaction is truly defined.
References
· Article 31 ter of the Income Tax Law.
· Administrative criterion MH-DGT-DNTI-DCN-CONS-0012-2026 on the full sale of a commercial establishment.
· Rules for determining the acquisition value and transfer value in the Law and its Regulations.