Quick answer
In Costa Rica, tax fraud becomes a crime when the evaded amount exceeds 500 base salaries (about ₡231 million in 2026), punishable by 5 to 10 years in prison. Below that, penalties are administrative: 50% of the underpaid tax, 1% a month for late payment, and fixed fines. Correcting before an audit cuts penalties by up to 80%.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my tax setup →You live, invest or run a business in Costa Rica and want to know where an honest mistake ends and fraud begins. This guide explains the 2026 rules, the penalties, how the tax administration finds gaps, and how to fix an error before it costs you.
Costa Rica tax fraud regulations in 2026: the key figures
| Item | 2026 rule |
|---|---|
| Main law | Tax Code (Código de Normas y Procedimientos Tributarios, Law 4755) |
| Criminal threshold | Evaded tax above 500 base salaries in a tax period |
| Prison for tax fraud | 5 to 10 years |
| Understated tax (administrative) | 50% of the difference |
| Late payment | 1% per month, capped at 20%, plus interest |
| Late filing | Fixed fine of 50% of a base salary |
| Voluntary correction discount | Up to 80% of the penalty |
| Statute of limitations | 4 years; 10 years if unregistered or no return filed |
Is this guide for you?
Read on if you…
- file Costa Rican returns as a self-employed person or through a company;
- own rental property or a short-term rental in Costa Rica;
- think a past return may be wrong and want to know your options.
Probably not your case if you…
- have no income, property or company in Costa Rica;
- only need the basics of the system. Start with the Costa Rica tax landscape overview.
What counts as tax fraud in Costa Rica?
The Tax Code draws a clear line between administrative infringements and tax crimes.
Administrative infringements
These cover errors and failures: filing late, paying late, understating tax, not issuing electronic invoices, or not keeping books. You pay fines and interest. Intent is not required.
Tax crimes
Tax fraud (defraudación fiscal, article 92) means deliberately evading tax, or obtaining undue refunds or benefits, through deception. Typical schemes:
- hiding sales or not invoicing them;
- recording fake expenses or invoices from shell suppliers;
- using nominee companies to hide the true owner;
- claiming exemptions you do not qualify for.
It becomes a crime only above the threshold of 500 base salaries per tax and period. The base salary for 2026 is ₡462,200, which puts the line near ₡231 million. Below it, the same conduct is punished administratively.
Withholding agents face a separate offence. Keeping taxes you withheld from staff or suppliers, instead of paying them over, is punished more strictly.
What are the penalties?
Criminal penalties
| Conduct | Penalty |
|---|---|
| Tax fraud above 500 base salaries | 5 to 10 years' prison |
| Keeping withheld or collected taxes | Prison, with thresholds and terms set in the Tax Code |
| Unauthorised access to tax information | Prison for officials and third parties |
Paying the full tax, interest and penalties before the case goes to court can extinguish criminal liability for a first offence.
Administrative penalties
- Late filing (article 79): 50% of a base salary per return, about ₡231,000.
- Late payment (article 80): 1% of the unpaid tax per month, up to 20%, plus interest.
- Understatement (article 81): 50% of the difference between what you declared and what you owed. It rises to 150% when the tax administration proves the figures were manipulated.
- Not issuing invoices (article 85–86): fines and temporary closure of your business for five days.
- Beneficial owner register (Law 9416): failing to file your company's ownership in the Central Bank's RTBF register costs 2% of gross income, capped at 100 base salaries.
How does the tax administration find out?
Costa Rica's tax administration has become data-driven since 2019. Here's the catch for expats: your foreign accounts are visible too.
- Electronic invoicing: every sale and purchase is reported in real time, so mismatches surface fast.
- TRIBU-CR: the new tax platform launched in 2025 cross-checks returns, invoices and withholding.
- Bank data: Law 9416 gives the tax administration access to bank information for tax purposes.
- International exchange: Costa Rica exchanges financial account data under the OECD Common Reporting Standard and with the US under FATCA. It also has information exchange agreements, covered in international tax treaties of Costa Rica.
- Registers: property, vehicles, companies and beneficial owners are cross-referenced.
Short-term rental hosts are a current focus, because platform data shows nightly income that was never declared.
How do you fix an error before it becomes a problem?
- Identify the gap. Compare your returns with invoices, bank statements and platform reports.
- File a corrective return (declaración rectificativa) in TRIBU-CR for each affected period.
- Pay the tax and interest. Interest runs from the original due date.
- Self-apply the penalty reduction. Under article 88, correcting before any audit notice reduces the penalty by up to 80%. After an audit starts, the discount shrinks.
- Keep evidence of every correction for at least the limitation period.
If your situation involves several years or a possible crime, get a local tax lawyer before filing.
Example – Daniel, Spanish surf-school owner in Santa Teresa
Daniel's company forgot to invoice cash lessons for two years. Undeclared sales: ₡30 million, so VAT of ₡3.9 million and income tax of about ₡4.5 million went unpaid. He files corrective returns before any audit. The 50% understatement penalty of ₡4.2 million drops by 80% to ₡840,000. With interest of about ₡1.3 million, his total extra cost is around ₡10.5 million. Had the tax administration found it first, the penalty alone could have stayed at ₡4.2 million.
Daniel fixed his gap before the tax office did and kept most of the penalty. Your records might hide a gap too.
Check your Costa Rican tax setup before an audit does it for you.
Check my tax setup →Common mistakes (and what they cost)
- Not issuing electronic invoices for cash sales → understatement penalties of 50% and a five-day business closure.
- Thinking foreign accounts are invisible → CRS data triggers questions, and any local-source income they reveal is assessed with penalties.
- Skipping the RTBF filing for a holding company → a fine of up to 2% of gross income, even for a company that only owns a house.
- Waiting for the audit to correct → losing most of the 80% voluntary discount.
- Filing late "because nothing is due" → a fixed fine of half a base salary per return anyway.
Frequently asked questions
What is considered tax fraud in Costa Rica?
Tax fraud is deliberately evading tax, or getting undue refunds or benefits, through deceit such as hidden sales, fake invoices or nominee structures. It is a crime under article 92 of the Tax Code when the evaded amount exceeds 500 base salaries per tax and period. Below that, the same conduct leads to administrative penalties.
Can you go to jail for tax evasion in Costa Rica?
Yes. If the evaded tax exceeds 500 base salaries in a tax period, roughly ₡231 million in 2026, the penalty is 5 to 10 years in prison. Keeping taxes withheld from employees or suppliers is also a crime. Smaller amounts are handled through administrative fines and interest rather than prosecution.
What is the fine for paying taxes late in Costa Rica?
Late payment costs 1% of the unpaid tax for each month or part of a month, capped at 20%, plus interest from the due date. Filing late is a separate fine of half a base salary per return. Both apply even when you file and pay voluntarily, though penalty reductions are available.
How far back can the Costa Rican tax office audit?
The ordinary limitation period is four years. It extends to ten years if you are not registered with the tax administration or did not file the relevant returns. The clock usually starts on 1 January of the year after the return was due. Keep your records for at least that long.
Does Costa Rica share bank data with other countries?
Yes. Costa Rica exchanges financial account information under the OECD Common Reporting Standard and with the United States under FATCA. It also signs information exchange agreements with several countries. In the other direction, it receives data on accounts its residents hold abroad, which helps it check local-source income.
How can I reduce penalties for a past mistake?
File a corrective return and pay the tax and interest before the tax administration contacts you. Article 88 of the Tax Code then reduces the penalty by up to 80%. The discount is smaller once an audit has started. For large or multi-year issues, a local tax lawyer can help manage the process.
Related guides
- Costa Rica tax landscape overview – the full system on one page
- International tax treaties of Costa Rica – information exchange and treaties
- Business expenses in Costa Rica – the invoicing rules behind valid deductions
- Specific taxes in Costa Rica – VAT, property and company taxes
- Tax fraud regulations of Paraguay – the regional comparison
- Tax fraud regulations of Mexico – fake invoices and EFOS lists
- All country tax guides
Sources
- Ministerio de Hacienda – tax administration
- SCIJ – Tax Code (Law 4755) and Law 9416
- Poder Judicial de Costa Rica
- Banco Central de Costa Rica – RTBF register
- OECD – Automatic exchange of information
This guide is general information, not personalised tax advice. See how we research and review.
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