Costa Rica's tax system is territorial — it taxes only income sourced within Costa Rica. Foreign income is simply outside the Costa Rican tax base, regardless of tax residency. For digital nomads earning from foreign employers or clients, this means effective 0% Costa Rican tax on their income, without needing special regimes or elections. It's one of the cleanest tax positions in Latin America.
When does Costa Rica tax you?
Costa Rica's territorial system means that even as a tax resident, only Costa Rican-source income is taxable:
- Salary from a Costa Rican employer
- Rent from Costa Rican property
- Dividends from Costa Rican companies
- Interest on Costa Rican-bank-held savings above specific thresholds
- Capital gains on Costa Rican asset sales
Foreign income — your remote salary, foreign-source freelance earnings, foreign investments, foreign rental income — is not taxed in Costa Rica, period.
Tax residency — why it still matters
You become a Costa Rican tax resident if you spend 183 days or more in Costa Rica during a tax year. Tax residency doesn't trigger worldwide income taxation (because of the territorial system), but it does:
- Open the door to Costa Rican personal deductions.
- Require filing a Costa Rican tax return if you have any Costa Rican-source income.
- Support your claim to be non-resident elsewhere (by establishing Costa Rica as primary).
Costa Rican tax rates (for Costa Rican-source income)
Employment income progressive scale (2026):
| Monthly income (CRC) | Approx USD | Marginal rate |
|---|---|---|
| up to 941,000 | up to $1,800 | 0% |
| 941,000 – 1,381,000 | $1,800 – $2,640 | 10% |
| 1,381,000 – 2,423,000 | $2,640 – $4,640 | 15% |
| 2,423,000 – 4,845,000 | $4,640 – $9,280 | 20% |
| over 4,845,000 | $9,280+ | 25% |
These rates apply only to Costa Rican-source income, which most remote-worker nomads have zero of.
The US-citizen wrinkle
US citizens remain liable for US tax on worldwide income regardless of Costa Rican residency:
- US tax treaty with Costa Rica exists (2006), prevents double taxation via FTC (though irrelevant since CR tax on personal income is $0 for nomads).
- FEIE (~$126,500 for 2025) excludes foreign-earned income if physical-presence (330+ days abroad) or bona-fide-residence test is met.
- Without Costa Rican tax to offset via FTC, the FEIE is the main US-tax-reduction mechanism.
- Self-employed US nomads still owe self-employment tax (~15.3%) unless covered by a totalization agreement — which exists for US-Costa Rica.
For a US citizen earning $100,000 living in Costa Rica on the nomad visa: FEIE excludes the first $126,500, so US tax ~$0; Costa Rican tax ~$0. Total effective ~0% on income up to FEIE cap.
The UK/EU-citizen wrinkle
UK and EU nationals who formally de-register from their home country tax system and become Costa Rican tax resident can achieve genuinely zero tax on foreign income:
- UK: must meet Statutory Residence Test non-resident criteria (day count + ties).
- EU: formal de-registration (Abmeldung, consent, etc.) at home country town hall.
- Australia: use departure mechanism.
- Costa Rican tax residency (183+ days) establishes new primary residence.
Social security
Costa Rica's Caja Costarricense de Seguro Social (CCSS) enrollment is mandatory for residents with Costa Rican-source employment. Nomad visa holders with only foreign income typically enroll voluntarily at a reduced rate (~$100–200/month) to access public healthcare, or maintain private international insurance. CCSS is required for the nomad visa application.
VAT and sales tax
Costa Rica has 13% VAT (IVA) on most goods and services. Applies to consumption regardless of tax-residency status.
Double-tax treaties
Costa Rica has tax treaties with Spain, Germany, Mexico, Chile, South Korea, Netherlands, UAE, and others. Notably, Costa Rica and the US have a treaty but it's limited to FATCA-style reporting rather than comprehensive. Annual tax return cadence: December 15 for the prior calendar year.