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Costa Rica's tax treaties: four income tax treaties in force (Spain, Germany, Mexico, UAE), the BEPS multilateral instrument and treaty rates

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Last verified: 2026-10-29 · Status: Stable

Costa Rica has four comprehensive income tax treaties approved by law: Spain (Ley 8888), Germany (Ley 9345), Mexico (Ley 9644) and the United Arab Emirates (Ley 9963), and it approved the OECD multilateral instrument by Ley 9751 of 2019. The treaties cut withholding on qualifying dividends to 5% and on interest and royalties to 5% to 12%, against domestic rates of 15% and 25%. There is no income tax treaty with the United States, Argentina or the other Latin American countries, so the domestic rates in Ley 7092 art. 59 apply to them.

USD figures use the Banco Central de Costa Rica reference selling rate of ₡454.82 per US dollar published for 29 October 2026 (indicator 318 on bccr.fi.cr), rounded to the cent. The salario base for 2026 is ₡462,200 (Circular 246-2025 of the Consejo Superior del Poder Judicial, under Ley 7337 art. 2).

Key facts

Comprehensive income tax treaties approved by law4 treatiesLeyes 8888, 9345, 9644, 9963, as of 2026-10-29 · in force
Treaty partnersSpain, Germany, Mexico, United Arab Emirates Leyes 8888, 9345, 9644, 9963, as of 2026-10-29 · in force
OECD multilateral instrument approvedYes, Ley 9751 of 29 October 2019 Ley 9751, as of 2026-10-29 · in force
Income tax treaty with ArgentinaNone SCIJ treaty records, as of 2026-10-29 · in force
Income tax treaty with the United StatesNone SCIJ treaty records, as of 2026-10-29 · in force

The rule

1. Spain: dividends 5% if the beneficial owner is a company holding at least 20% directly, 12% otherwise (art. 10); interest 5% for loans of five years or more, 10% otherwise (art. 11); royalties 10% (art. 12). The convention entered into force on 15 December 2010 and applies to taxes due from 1 January 2011 (art. 28, per the Spanish official gazette).Ley 8888, Convention between Costa Rica and Spain, art. 10, 11, 12 and 28, 2010-11-03 official text · verified 2026-10-29
2. Germany: dividends 5% for companies holding at least 20% directly, 15% otherwise (art. 10); interest 5% (art. 11); royalties 10% (art. 12). Costa Rica ratified the agreement by Decreto Ejecutivo 39691 of 25 April 2016; withholding provisions apply to amounts paid from 1 January of the year after entry into force.Ley 9345, Agreement between Costa Rica and Germany, art. 10, 11 and 12, 2016-02-02 official text · verified 2026-10-29
3. Mexico: dividends 5% for companies holding at least 20% directly, 12% otherwise (art. 10); interest 10% (art. 11); royalties 10% (art. 12). The agreement enters into force 30 days after the last notification and its withholding provisions apply from 1 January of the following year.Ley 9644, Agreement between Costa Rica and Mexico, art. 10, 11 and 12, 2018-12-19 official text · verified 2026-10-29
4. United Arab Emirates: dividends 5% for companies holding at least 20% directly for 365 days including the payment date, 15% otherwise (art. 10); interest 5% for loans of at least five years, 10% otherwise (art. 11); royalties 12% (art. 12); dividends and interest paid to the other State, its central bank, pension funds and qualified government entities are taxable only in the residence State.Ley 9963, Convention between Costa Rica and the United Arab Emirates, art. 10, 11 and 12; protocol point 2, 2021-03-24 official text · verified 2026-10-29
5. Costa Rica approved the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS by Ley 9751 of 29 October 2019.Ley 9751, single article, 2019-10-29 official text · verified 2026-10-29
6. Under domestic law the payer may apply treaty rates; transfer pricing correlative adjustments are available only where a treaty in force provides for them (Reglamento art. 76). Expenses paid to jurisdictions with no information exchange agreement or treaty with an exchange clause and a profit tax rate more than 40% below 30% are non deductible unless proven real (Ley 7092 art. 9(k)).Ley 7092; Decreto Ejecutivo 43198-H, Ley 7092 art. 9(k); Reglamento art. 76, 2021-07-22 official text · verified 2026-10-29
PartnerLawDividends (20%+ / other)InterestRoyalties
Domestic lawLey 7092 art. 5915%15% (5.5% supervised lenders)25%
SpainLey 88885% / 12%5% (5+ years) / 10%10%
GermanyLey 93455% / 15%5%10%
MexicoLey 96445% / 12%10%10%
United Arab EmiratesLey 99635% / 15%5% (5+ years) / 10%12%

Treaty withholding caps versus domestic rates.

Worked example

  • A Spanish parent owning 100% receives a ₡45,482,000 (US$100,000.00) dividend: 5% treaty withholding is US$5,000 instead of US$15,000 under domestic law, a saving of US$10,000.
  • An Argentine shareholder has no treaty: the 15% Costa Rican withholding is final in Costa Rica, and relief, if any, comes from Argentine rules covered in The Argentine Thread guide.

Step by step

  1. Confirm the recipient's residence with a certificate from its tax authority.
  2. Check beneficial ownership, the 20% direct holding and, for the UAE, the 365 day holding period.
  3. Apply the treaty rate at source and keep the evidence for audit.
  4. For transfer pricing disputes, use the treaty's mutual agreement procedure.

Common traps

  • Holding structures in non treaty jurisdictions get the domestic rates and may fall within the non cooperative jurisdiction rules.
  • Treaty dividend rates of 12% and 15% give no saving against the 15% domestic rate.
  • The payer remains jointly liable if a treaty rate is applied without support (Ley 7092 art. 56).

Sources

Related pages

Related: Costa Rica country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

← Tax losses in Costa Rica: three year carryforward, five years for agricultural, new industrial and audiovisual companies, no carrybackCapital gains tax in Costa Rica: 15% on gains, 2.25% of price option for older assets, 2.5% buyer withholding when non residents sell real estate →

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