On 28 February 2018, the Budget bill 2018 was sent to the Assembly proposing to replace the existing sales tax with a value added tax (VAT). It also amends the Income Tax Act by introducing a new capital gains tax, tax neutrality for certain corporate restructurings, and a new limitation on the deductibility of certain payments.
Under the current provisions of the Income Tax Act, capital gains realized on the transfer of Costa Rican shares by residents and non-residents are not subject to tax unless the seller is ordinarily involved in securities trading. If the bill is passed, capital gains made by residents, whether natural or legal persons, on the transfer of shares in a Costa Rican entity would be subject to tax at a 15% rate. Non-resident sellers of shares in Costa Rican companies would remain not subject to this tax.
The Costa Rican Assembly is expected to pass the Bill in June and would apply as of January 1, 2019.
