Licda. Xochilt Quezada López.
Operating a successful Airbnb in Costa Rica goes beyond providing great hospitality—it requires mastering your tax obligations. With greater transparency and data sharing on the horizon, now is the time to ensure you are fully compliant with Costa Rican tax law.
This guide breaks down your current obligations and explains the important changes that will affect every host in the near future.
Current Tax Responsibilities for All Airbnb Hosts
If you are renting out a property in Costa Rica for periods of less than 30 days, you are legally required to manage the following taxes and registrations:
Value Added Tax (IVA): In Costa Rica, this is known as the Impuesto al Valor Agregado (IVA). A 13% VAT must be applied to the total price of the accommodation. As the host, you are responsible for collecting this tax from your guests and remitting it to the Costa Rican tax authority, known as Hacienda. While Airbnb collects and remits VAT on its own service fees, the responsibility for the tax on the rental income itself rests solely with you.
Income Tax: All income you generate from your rental property is subject to Costa Rican income tax. The specific rate and calculation will depend on your individual circumstances, such as your residency status and total annual income. There is more specific information in our article "Navigating Costa Rica's Tax Landscape for Short-Term Rentals."
Mandatory Registration: To operate legally, you must register with two government bodies: the Costa Rican Tourism Institute (ICT) and the Tax Administration (Hacienda). When registering with Hacienda, you must use the specific economic activity code "55101: Residential Rentals less than one month".
A New Era of Transparency: Data Sharing Begins in 2026
A significant change is coming. As part of Costa Rica's commitment to the OECD's global tax transparency framework, digital platforms will soon be required to share host data directly with Hacienda.
Starting at the end of 2026, Airbnb will report detailed information for all transactions that occurred in 2025 and onward. This data will include:
The host's name
Total income generated
Details of the rental property
This direct reporting will give Hacienda a clear view of all rental activity, making it simple for them to verify that hosts are reporting their income correctly. The Finance Ministry has strongly urged all hosts to register and begin declaring their income now to avoid future penalties.
Special Considerations for Canadian Hosts
For Canadian citizens earning rental income in Costa Rica, the situation has an added layer of complexity.
No Double Taxation Treaty: As of August 2025, Canada and Costa Rica do not have a comprehensive double taxation agreement (DTA). This means there is no formal treaty to automatically prevent your rental income from being taxed by both countries.
Tax Information Exchange Agreement (TIEA): While there is no DTA, the two countries do have a TIEA in place. This agreement allows the tax authorities of Canada and Costa Rica to exchange information to enforce their respective domestic tax laws, ensuring taxpayers are accurately reporting their global income. Here is the full text of the “Agreement between Canada and the Republic of Costa Rica for the Exchange of Information on Tax Matters.”
Your Reporting Obligations: As a Canadian resident, you must pay the applicable income tax in Costa Rica on your rental earnings. You are also required to report this same income on your Canadian tax return. To prevent being taxed twice on the same income, you can claim a foreign tax credit on your Canadian return for the income taxes you have already paid to the Costa Rican government.
The Cost of Non-Compliance: Understanding the Penalties
The Costa Rican government enforces these rules with significant financial penalties. Understanding the specific fines for non-compliance makes the importance of getting it right from the start crystal clear:
Failure to Register:
Not registering with the Costa Rican Tourism Institute (ICT) can result in a fine of approximately ¢1.3 million (around $2,600 USD).
Not registering with the Tax Administration (Hacienda) carries a potential fine of up to ¢1,386,600 (around $2,800 USD).
Failure to File Tax Declarations:
The penalty for each late tax declaration is 50% of a base salary. For 2024, the official base salary is ¢462,200. This means that failing to file just two monthly declarations on time would result in a total fine of ¢462,200.
These penalties underscore the importance of proactive compliance. The costs of ignoring these requirements far outweigh the effort needed to get registered and file correctly.
The Path Forward: Ensure Your Compliance
The message from the Costa Rican government is clear: the era of undeclared rental income is coming to an end. The upcoming data-sharing measures will make non-compliance easy to detect.
It is highly recommended that you consult with a qualified tax advisor who is knowledgeable about both Costa Rican and Canadian tax laws. A professional can help you navigate the registration process, ensure you are correctly calculating and remitting VAT and income tax, and properly claim any available foreign tax credits in Canada. Here is a link regarding Canadian “Federal Foreign Tax Credits.”
Your Compliance Checklist:
Complete your registrations with the ICT and Hacienda (using activity code 55101).
Implement a system to correctly charge and remit the 13% IVA on all stays.
Declare all rental income and file the corresponding tax returns.
Consult a professional to ensure all obligations are met.
Taking proactive steps to manage your tax obligations is a critical investment in your business, protecting you from penalties and building a professional, sustainable operation poised for long-term success.
The information provided is for informational purposes and does not constitute legal or financial advice. Consult a qualified Costa Rican professional for your specific situation. ©2004-2025 Costa Rica Expertise. With credit (CC BY 4.0), you can use it for free. 1250817 ZZ!
