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

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

Costa Rica

• A notice provides several updates within Annexes and Structures 4.4 of Electronic Invoices for tax purposes.
• Resolution MH-DGT-RES-0015-2026 updates the applicable criteria governing the relationship between IFRS and IFRS for small and medium-sized entities (SMEs).
• Private Letter RullingN°MH-DGT-CONS-119-001-2026 concludes that payments for international transportation services made to nonresident providers do constitute Costa Rican-source income and, therefore, are subject to income tax on remittances (IRE) at a 25% rate.

Guatemala

• The Congress of the Republic approved elimination of the income tax on salary income for employees earning the minimum wage.

Panama

• Bill # 641 introduces economic substance rules applicable to certain foreign-source passive income earned by entities that are part of multinational groups.
• The General Directorate of Revenue has begun auditing the provisions of the Multilateral Instrument (MLI), substantially raising the evidentiary standards for taxpayers seeking to benefit from income tax treaties.
• The Full Bench of the Supreme Court declared Article 379 of the Tax Procedure Code unconstitutional, finding that it violates due process, the principle of the natural judge, and the exclusive jurisdiction of the Third Chamber to determine the State’s patrimonial liability.

Dominican Republic

• Resolution No. DDG-AR1-2026-00003 sets out updated inflation adjustment multipliers and exchange rates applicable to the treatment of foreign exchange differences for the March 2026 fiscal year-end.
• Notice No. 04 26 reiterates that legal entities and entities without legal personality, whether resident or nonresident, are required to identify and maintain updated information regarding their ultimate beneficiary owners (UBOs).
• The Constitutional Court held (judgment TC/0182/26) that certain taxes associated with foreign exchange differences derived from transactions carried out in foreign currency were appropriately imposed.