Author: Mauro Esquivel

The new income tax brackets are effective from January 1 to December 31, 2021. An adjustment must be made each year, as provided in Law 7092, and in accordance with the Consumer Price Index.

This update responds to the variation in the Consumer Price Index (CPI) which measures how the prices of products change. It is assumed that, with that, people’s incomes also change. The indicator is measured by the National Institute of Statistics and Censuses (INEC).

Law 9635 “Law for the Strengthening of Public Finances”, modified the ordinary fiscal period of income tax, so that now the closing of the period is December 31 of each year, and the deadline to file and pay, without fines, was moved to March 15 of the following year.


The tax that must be paid for the salary increased by 0.28% as of January 1, 2021.

The new tranches will affect all wage earners whose income is higher than ₡ 842,000.00 per month. Before that amount they are exempt.

With adjustment, these are the new legs:

-Salary up to ₡ 842,000.00: exempt.

-Between ₡ 842,000.00 and up to ₡ 1,236,000.00 per month: 10%.

-Between ₡ 1,236,000.00 and up to ₡ 2,169,000.00 per month: 15%.

-Between ₡ 2,169,000.00 and up to ₡ 4,337,000.00 per month: 20%.

-Over the excess of ₡ 4,337,000.00 per month: 25%.

Additionally, wage earners are entitled to a tax credit, which is a reduction that is applied to the tax for being married or having children, which is also adjusted each year.

The monthly tax credit per child remained at ₡ 1,570, as confirmed by Taxation, and the tax credit per spouse went from ₡ 2,360 to ₡ 2,370.


-Annual net income (profit) up to ₡ 3,742,000.00: Exempt.

-Over the excess of ₡ 3,742,000.00 and up to ₡ 5,589,000.00 of annual net income: 10%.

-Over the excess of ₡ 5,589,000.00 and up to ₡ 9,322,000.00 of annual net income: 15%.

-Over the excess of ₡ 9,322,000.00 and up to ₡ 18,683,000.00 of annual net income: 20%.

-Over the excess of ₡ 18,683,000.00 of annual net income: 25%

The exception to the deduction is in salaried persons who also carry out a lucrative activity. If as a salaried employee you already enjoy an exempt section, then you do not have it as a natural person with lucrative activity.

The modification affects LEGAL PERSONS (COMPANIES), for whom the new sections apply as detailed below:

Applies for gross income (total income) that does not exceed ₡ 109,337,000.00 during the fiscal period:

-On the first ₡ 5,157,000.00 of annual net income (income less expenses = utility): 5%.

-Between ₡ 5,157,000.00 and up to ₡ 7,737,000.00 of annual net income: 10%.

-Between ₡ 7,737,000.00 and up to ₡ 10,315,000.00 of annual net income: 15%.

-Over the excess of ₡ 10,315,000.00 of annual net income: 20%.

If the gross income during the fiscal period exceeds ₡ 109,337,000.00, the previous parameters do not apply and you must pay 30% of the annual net income.



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