Income Tax Law - Capital Income and Lucrative Activities

Ley N.º 7092, Income Tax Law (Ley del Impuesto sobre la Renta, dated April 21, 1988, as amended), is the core law regulating taxes on income generated in Costa Rica. It covers several distinct tax regimes depending on the type of income. (For income tax on employee salaries, see the net salary calculator in this same application — it uses the current rates from Decreto 45333-H, which are updated annually.)

Movable capital income (interest, dividends, royalties): fixed rate of 15% on gross income, typically withheld at the source by the payer (bank, company, etc.). There are special reduced rates: 7% on interest from housing financial system securities, 10% on cooperative dividends (since July 2022), and a scale from 5% to 10% for returns from solidary associations (asociaciones solidaristas) depending on the amount.

Real estate capital income (rental income): 15% rate applied to 85% of gross rental income (a 15% expense deduction is presumed without needing proof), resulting in an effective tax rate of approximately 12.75% on the total amount received. Property owners who have at least one registered employee can choose instead to declare their actual expenses under the ordinary income tax regime.

Income from lucrative activities (independent contractors/freelancers and sole proprietorships/individuals in business, non-salaried): progressive annual brackets (effective for 2026, adjusted annually by decree based on inflation):

• Up to ₡6,244,000 annually: exempt (0%)
• Excess up to ₡8,329,000: 10%
• Excess up to ₡10,414,000: 15%
• Excess up to ₡20,872,000: 20%
• Excess over ₡20,872,000: 25%

Just like with income tax on salaries, you only pay tax on the excess within each bracket, not on total income at the highest rate. 2026 tax credits: ₡20,520 annually per child, ₡31,080 annually per spouse.

Small corporate entities (annual gross income under ₡119,174,000): apply a reduced scale from 5% to 20%, with tax brackets that differ from those for individuals.

Note: tax bracket amounts and tax credits are adjusted each year by executive decree according to the Consumer Price Index — confirm current rates in TRIBU-CR or with an accountant before filing. This summary sheet outlines the general structure and does not cover all special regimes under the law.