Let’s be honest—nobody enjoys paying taxes. However, if you own a vacation rental property in Costa Rica, paying taxes is simply part of doing business responsibly. More importantly, these taxes help fund the country’s infrastructure, healthcare, education, and public services that make Costa Rica such a wonderful place to live and visit.

For many foreign property owners, understanding the Costa Rican tax system can be overwhelming. Information is often scattered, difficult to interpret, or only available in Spanish. Questions such as “Do I need to register my corporation as active?”, “Which tax regime is right for me?”, or “How do electronic invoices work?” are common—and finding clear answers isn’t always easy.

That’s why we’ve created this practical guide. Our goal is to explain the process in straightforward language and walk you through the basic steps required to legally register your vacation rental business and comply with Costa Rican tax regulations. Whether you’re just getting started or want to make sure your property is set up correctly, we hope this guide helps make the process a little easier.

If your property is owned through a Costa Rican corporation, you are required to comply with Costa Rican tax regulations when renting the property, regardless of whether you also pay taxes in your home country.

This guide provides a general overview of the steps required to formalize your rental activity and the options available for paying income taxes.

Please note that this guide is for informational purposes only. Your accountant should advise you on your specific tax situation.

Taxes Applicable to Vacation Rentals

There are two main taxes applicable to vacation rental properties in Costa Rica.

1. Value Added Tax (IVA)

The VAT rate for vacation rentals is 13%.

You may either:

• charge the 13% VAT to your guests, or
• absorb the VAT as part of the amount you receive from booking platforms such as Airbnb or VRBO.

2. Income Tax

Rental income is also subject to Costa Rican income tax.

There are two different taxation regimes available, each with its own advantages depending on your circumstances.

These options are explained later in this guide.

Step 1 – Appoint an Accountant

The first step is to appoint a Costa Rican accountant.

An accountant will:

• register your corporation correctly with the Tax Administration (Hacienda);
• advise you on the most suitable tax regime;
• prepare and file your tax returns;
• assist with electronic invoicing (Factura Electrónica).

Monthly accounting fees are generally reasonable and depend on the size of your business and the number of transactions.

Step 2 – Verify Whether Your Corporation is Active or Inactive

Your accountant should verify whether the corporation that owns your property is currently registered with Hacienda as Active or Inactive.

Only active corporations may legally conduct rental activities and report rental income.

Many corporations that only own property are initially registered as Inactive and must first be activated before rental income can be reported.

One indication of your corporation’s status is the annual corporate tax (as of 2026) that has been paid.

Corporation Status	Annual Corporate Tax
Inactive Corporation	₡69,330
Active Corporation (Small)	₡115,550

Step 3 – Register for Factura Electrónica

Once the corporation is registered as Active, you must obtain a Factura Electrónica (electronic invoicing system).

Electronic invoices must be issued for rental income.

Generally:

• Foreign guests receive an electronic receipt (“Tiquete Electrónico”).
• Costa Rican clients receive a Factura Electrónica.

Your accountant will recommend a Factura Electrónica provider and complete the registration.

Typical costs are approximately:

Business Size	Typical Cost
Very low volume	₡14,000 – ₡30,000 per year
Small business	₡6,500 – ₡12,750 per month

Step 4 – Filing and Paying Taxes

Once your business is registered, Hacienda will determine which tax returns must be submitted.

Your accountant will normally monitor these obligations through the TRIBU-CR platform and prepare the necessary returns.

Taxes can be paid online through participating Costa Rican banks.

Income Tax Options

Option 1 – Simplified Rental Income Regime

This is the simplest option for most vacation rental owners.

Tax Rate

• Income tax is 15% of the taxable income.
• Taxable income is automatically calculated as 85% of the gross rental income.
• This results in an effective tax rate of approximately 12.75% of the gross rental income.

Advantages

• No requirement to keep detailed expense records for tax deduction purposes.
• No requirement to have an employee registered with the Costa Rican Social Security Fund (CCSS).
• Simple monthly reporting.

Example

Monthly rental income: US$2,000

Description	Amount
Gross rental income	$2,000
Automatic deduction (15%)	$300
Taxable income	$1,700
Income tax (15%)	$255

Monthly income tax payable: US$255

Please note: Costa Rican taxes are paid in Costa Rican Colones. Hacienda automatically applies the official exchange rate when the electronic invoice is issued.

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Option 2 – Corporate Income Tax Regime (Actual Expense Deduction)

Instead of using the simplified system, a corporation may voluntarily elect to join the traditional Corporate Income Tax Regime (Impuesto sobre las Utilidades).

Under this regime, actual business expenses may be deducted before calculating income tax.

Requirements

To qualify, the corporation must:

• have at least one employee registered with the CCSS;
• complete the required registration process with Hacienda;
• remain in this tax regime for a minimum of five years.

Advantages

Actual business expenses may be deducted, including:

• maintenance;
• repairs;
• depreciation;
• mortgage or loan interest;
• other qualifying operating expenses.

Only expenses supported by a valid Factura Electrónica issued to the corporation may be deducted.

Reporting Requirements

Under this regime:

• an annual Corporate Income Tax Return must be filed;
• monthly VAT (IVA) returns remain mandatory.

Annual Net Income Tax Brackets – These are progressive tax brackets, meaning the tax rate only applies to the portion of income that falls within each bracket, not to your entire annual income.

Annual Net Taxable Income	Applicable Tax Rate
On the first ₡5,621,000 of annual net taxable income	5%
On the portion exceeding ₡5,621,000 up to ₡8,433,000 of annual net taxable income	10%
On the portion exceeding ₡8,433,000 up to ₡11,243,000 of annual net taxable income	15%
On the portion exceeding ₡11,243,000 of annual net taxable income	20%

How We Can Assist?

As your property manager we can assist you throughout this process.

Our services include:

Accountant Coordination

• Recommend experienced local accountants.
• Assist with communication between you and your accountant.

Electronic Invoicing

• Prepare and issue your monthly electronic invoices using your Factura Electrónica system.

Tax Payments

• Monitor outstanding tax obligations through TRIBU.
• Make tax payments on your behalf when authorized.

As not all Costa Rican banks process tax payments, we visit participating banks such as Banco de Costa Rica (BCR) and BAC Credomatic each month to ensure taxes are paid on time.

Our goal is to simplify the administrative requirements of owning a vacation rental in Costa Rica, allowing you to remain compliant while focusing on maximizing the return on your investment.