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Costa Rica: Bill proposing new tax incentive regime and tax expenditure controls submitted to Parliament

Bill would centralize oversight of tax incentives and modify certain existing exemptions.

October 1, 2026

The Costa Rican Executive Branch on September 22, 2026, submitted bill No. 25.797, proposing a comprehensive regime for tax incentives administered by the Ministry of Finance, to the Parliament (Legislative Assembly).

The bill would:

  • Transfer responsibility for granting, controlling, and supervising tax incentives to the General Directorate of Taxation
  • Require taxpayers to meet certain tax and social security compliance requirements to obtain and maintain tax incentives
  • Introduce penalties for the improper use of tax incentives and certain reporting failures
  • Repeal certain exemptions from customs duties, VAT, selective consumption tax, and vehicle property tax
  • Maintain specified exemptions and incentives, including certain benefits for free trade zones, healthcare, agriculture and fishing, public transportation, tourism, and certain social organizations

The bill remains under consideration by the Legislative Assembly and has not become effective.

Read a September 2026 report (Spanish) prepared by the KPMG member firm in Costa Rica

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