Central America and the Caribbean: Tax developments in Costa Rica, Guatemala, Panama, Dominican Republic, and Honduras

The KPMG member firm in Costa Rica prepared its monthly report for February 2026, covering the following tax developments in Central America and the Caribbean:

Costa Rica

• Resolution MH-DGH-RES-0001-2026 exempts single‑property owners with relatively low‑value properties from 2026 municipal real estate tax.
• Resolution MH-DGH-RES-0004-2026 sets new specific tax rates per ml of pure alcohol, based on alcohol by volume.
• Executive Decree No. 45500-H reforms the tax procedure regulations to align them with the new organizational structure of the Tax Administration (DGT).
• The Administrative Tax Court held in TFA No. 035-P-2026 that certain employee benefits (mileage, meals) are not subject to income tax when they meet specific conditions.

Guatemala

• Decree 6-2026 repeals the tax on inheritances, legacies, and donations, effective 30 days after publication.

Panama

• The Municipal Council of Panama granted a full exemption from the municipal construction tax for the “Fourth Bridge” mega‑project.
• As part of implementation of Law 473 of 2025 (the “total price” rule), all goods and services must display the total price, including value added tax (VAT or ITBMS) and any other taxes, effective June 19, 2026.
• The Administrative Tax Court on January 20, 2026, held in TAT-RF-001 that a request to avoid the alternate method of calculating income tax is valid only if the income tax return is filed within the legal deadline.

Dominican Republic

• Under Law No. 100-25, which authorizes the executive branch to issue public debt securities, new public debt instruments receive differentiated tax treatment (local vs. international), and companies can use matured government securities to settle income tax liabilities.
• DGII Circular 03-2026 establishes a temporary program providing discounts for tax debts.
• The Superior Administrative Court held in judgment 0030-02-2026-SSEN-00051 that failure to meet formal requirements in tax litigation (contentious tax appeals) results in inadmissibility.
• The Superior Administrative Court held in judgment 0030-02-2026-SSEN-00106 that properties built for sale must be classified as inventory, not capital assets, and that income from their sale is ordinary income subject to corporate income tax (ISR).

Honduras

• Decree 7-2026 introduces multiple tax amnesty measures for the first half of 2026.