Costa Rica Wants 15% of Your Income Back Home. Here's Who Would Actually Pay.

On September 22, 2026, the executive branch filed Bill 25.796, the Law on the Taxation of Foreign-Source Passive Income and the Elimination of Tax Credits for Thematic Public Securities, with the Legislative Assembly. It would apply a general 15% rate to five kinds of income that Costa Rica tax residents earn outside the country:

It would reach individuals, companies, trusts, investment funds and similar structures resident in Costa Rica, even people who don't run any business here. Today, under the 2023 reform (Law 10.381), this kind of foreign passive income is mostly taxed only when it's earned by certain multinational-group entities that lack economic substance. The bill drops those conditions and uses tax residence as the trigger instead.

The government says this does not make Costa Rica a worldwide-tax country, and technically that's true. Territoriality stays the general rule. But the tax advisors writing about it call it a broad, structural exception, and one of the most far-reaching tax proposals filed to date.

This is the part most buyers get wrong. Buying a condo in Tamarindo doesn't make you a Costa Rica tax resident, and neither does a residency card on its own. Immigration residency and tax residency are two separate questions.

Under the income tax regulations, an individual generally becomes a tax resident by spending more than 183 days in Costa Rica during the same fiscal period, counting arrival and departure days.

The Tico Times summed it up well. This is not a 15% tax on every dollar that comes in from abroad. The bill targets interest, dividends, royalties, rents and capital gains. As filed, it does not simply say that pensions, salaries or retirement income would automatically be taxed. How each income stream gets classified will matter.

Most countries handle double taxation with a credit, where tax you've already paid abroad is subtracted from the tax you owe. This bill uses a deduction instead: the foreign tax is subtracted from the income before the 15% is applied.

La Nación used this example. A resident receives $10,000 in rent abroad and paid $1,500 in tax where the property is. Costa Rica would tax a base of $8,500. At 15%, that's $1,275 more, for a combined $2,775 on $10,000 of rent. A credit would have left almost nothing owed in Costa Rica.

Grant Thornton's tax partner made the same point in La Nación: with this method, the total burden ends up above 15%, so the formula only softens double taxation instead of avoiding it. Two more details worth knowing:

U.S. citizens and green-card holders already report worldwide income to the IRS wherever they live. If this passes as written, a full-time U.S. resident of Costa Rica with a large taxable portfolio could owe both countries on the same dividends. Canadians who give up Canadian residency face a different setup back home, but the Costa Rica side would work the same way. That's why your CPA, not your realtor, should run the numbers, and why the final wording on credits and deductions matters so much.

An analysis by economist José Luis Arce, reported by CRHoy on October 2, estimates the tax would raise about ₡64,800 million a year, roughly 0.13% of GDP (around $140 million at the ₡455 exchange rate the analysis used). In his medium scenario, banks and dividends from direct investment abroad make up about 70% of that, and household portfolios count for little. In other words, the fiscal target is mostly institutions and corporate groups, not the retiree with a rental condo back home. That doesn't mean individuals are exempt. It means the bill is mainly built around a bigger revenue problem: the government projects its tax take falling from 12.8% of GDP in 2025 to 11.7% by 2031.