Costa Rica: Tax Incentives to Encourage Investment

The Directorate of Taxation issued a resolution which widens accelerated depreciation and is applicable to goods purchased and investments made this year.

Thursday, March 5, 2009


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María Siu wrote in the Prensa Libre website: "Now all taxpayers or declarers, without any resolution from the tax administration, may use the accelerated depreciation method on new tangible goods. Accelerated depreciation is part of the Government’s actions under the Shield Plan to face the economic crisis. Depreciation is an expense that companies can include in calculating the profits on which to pay their taxes. This mechanism applies only to the depreciation of new assets acquired or realized from January 1 to December 31, 2009."

More on this topic

Costa Rica: Selective Tax on Used Vehicles

August 2013

Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.

From a press release from the Ministry of Finance in Costa Rica:

The Ministry of Finance reported today that after reviewing the effects of the update of the value of the vehicles that has been in force since December 2012, the implementation of the new Law on Transit, and the small amount of economic activity of the vehicle import sector this year, the Unit has determined an adjustment to the tax rates applicable on selective consumption, in order to give coherence to the tax system between the new values ​​and the tax rate.

Costa Rica Reduces Hybrid Vehicle Tax

July 2013

The selective consumption tax charged on hybrid cars has dropped from 15% to 10%.

Among the reasons explaining the low penetration of hybrid vehicles in the Costa Rican market is the amount of taxes that are charged.

"New hybrid-electric vehicles under tariff headings 8703 and 8704, with cylinders not exceeding 2,000 cubic centimeters, will be able to benefit from a 20% reduction in the selective consumption tax," states the new provision.

Further Devaluation of Costa Rica's Currency Projected

May 2014

It has been noted that the Costa Rican Colon could depreciate 20% more against the dollar in the U.S. and with that correction the exchange rate will reach 650 colones per dollar during 2014.

The accelerated depreciation of the colon against the dollar in the first months of this year could continue throughout 2014.

Costa Rican legislators back removal of tax on diesel

July 2008

Legislators from several Costa Rican parties favor abolition of the sales tax on diesel, but only so long as there is no increase in gasoline prices.

The government had proposed removing the diesel tax but increasing the tax on gasoline.

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