Transfer Pricing in Costa Rica
Transfer Pricing Guide for SMEs

 The initial consideration in discussing Transfer Pricing from a tax perspective is understanding the definition of RELATED PARTY. Subsequently, we can commence the evaluation of the principle of free competition, ensuring that our recommendations at the conclusion of this document can be properly assessed.


As defined in Article 2 of the Income Tax Law, including those resident abroad or within the national territory who directly or indirectly participate in the management, control, or capital of the taxpayer. This also applies when the same individuals directly or indirectly participate in the management, control, or capital of both parties, or when they may systematically influence decisions about pricing due to some other objective cause. 

  1. Entities or Individuals in Non-Cooperative Jurisdictions. 
    • 1.1 Profit Tax exceeding 40% according to Article 15 of the Income Tax Law.
    • 1.2 Costa Rica lacks information exchange agreements or double taxation treaties.
  2.  One of them controls or owns, directly or indirectly, 25% of the social capital or voting rights. 
  3. Five or fewer individuals direct or control both legal entities, or at least 25% ownership of capital or voting rights in both entities. Legal entities constituting the same decision-making unit. 
    • By Majority Vote 
    • Authority to appoint and dismiss board members
    •  Disposal of the majority voting rights of agreements 
    • With votes designating the majority of the management body 
    • Executive members belong to the dominant legal entity or another entity dominating this one. 
  4. When a contract contributes to 25% of the contract's result or profit. 
  5. Resident individual in the country and its permanent establishments abroad. 
  6. Permanent establishment situated in the country and the parent company resident abroad.

Principle of Free Competition

All transactions carried out by a taxpayer with a related party should consider their income, costs, and deductions at a price they would establish with customers under similar conditions, adhering to the principles of free competition and economic reality.

It's important to remember that the determined price will be in accordance with the chosen methodology established in the same regulations

Methodology for Market Price

The determination of the price or margin agreed upon by independent parties in comparable operations can be carried out using any of the following methods: 

  • Comparable Uncontrolled Price Method
  • Cost Plus Method
  • Resale Price Method
  • Profit Split Method

Annual Informative Declaration

Article 81 states that taxpayers who meet any of the following conditions are required to file an annual informative declaration:

  • Transactions with related parties classified as large taxpayers, large territorial companies, or under the regime of free trade zones.
  • Transactions with related parties that annually exceed the equivalent of one thousand base salaries. (₡462,200,000 for the 2023 period)

Transfer Pricing Study Documentation.

After analyzing the aforementioned points, if your company or economic group is subject to Title V of Transfer Pricing, the next step is to begin preparing the information that the Tax Administration will request as follows:

  • From the Economic or Corporate Group:
    Corporate Structure Documents.
    Business Description.
    Available information for conducting representative analysis.
    Among others, request the complete matrix at this link.
  • From the Taxpayer in Costa Rica:
    Description of Operations.
    Cumulative Amount of Expenses by Categories.
    Identification of related parties.
    Indicate the transfer pricing method used.
    Among others, request the complete matrix at this link.

Document Retention Period.

As stipulated by the Tax Code of Norms and Procedures, information must be retained and made available to the Tax Administration for a period of five years.


Decree No. 43198-H.
Resolution DGT-R-0049-2019.
Tax Code of Norms and Procedures.

Commercial License with Municipality
Business requirement and application with local government