Costa Rica: the implications of the trade agreement with the United Arab Emirates (UAE)
Since 2021, Costa Rica and the United Arab Emirates (UAE) have had a Double Taxation Agreement (DTA) in force covering income and wealth taxes, approved through Law No. 9963. This agreement prevents the same income from being taxed in both jurisdictions while strengthening cooperation mechanisms to combat tax evasion.
The significance of this framework increased on April 1, 2025, when the Comprehensive Economic Partnership Agreement (CEPA) between Costa Rica and the United Arab Emirates entered into force. This is Costa Rica’s first trade agreement with a Middle Eastern country. The agreement expands trade and investment opportunities between the two economies while complementing the existing tax framework.
Impact: who benefits?
This new framework is particularly relevant for:
- Costa Rican exporting companies, especially those operating in technology, medical devices, agribusiness, tourism, and services;
- companies and individuals receiving cross-border payments from the United Arab Emirates, such as dividends, interest, royalties, or other internationally taxable income;
- UAE investors with current or future operations in Costa Rica;
- multinational groups maintaining commercial or financial relationships between the two jurisdictions.
From a trade perspective, the CEPA provides for the immediate elimination of tariffs on approximately 89% of tariff lines. An additional percentage will benefit from gradual tariff reductions over periods ranging from three to ten years.
Key tax considerations
The application of the DTA may provide significant benefits for taxpayers who meet the applicable requirements, including:
- reduction or elimination of international double taxation;
- greater legal certainty regarding the allocation of taxing rights between the two countries;
- specific rules governing the taxation of dividends, interest, royalties, and capital gains;
- information exchange and cooperation mechanisms between the respective tax authorities.
Access to these benefits is subject to compliance with both formal and substantive requirements, including proof of tax residency and, where applicable, beneficial ownership status.
Key dates to consider
Given the different agreements in force between Costa Rica and the United Arab Emirates, companies operating in Costa Rica should be aware of the following:
- Double Taxation Agreement (DTA): in force since 2021.
- Comprehensive Economic Partnership Agreement (CEPA): effective from April 1, 2025.
Companies with operations, investments, or financial flows between Costa Rica and the UAE should review their tax and commercial position to determine the scope of the benefits available under these agreements.
Recommendations
Companies and individuals engaged in cross-border activities between the two countries should:
- review their tax and corporate structure to identify potential double taxation scenarios;
- verify compliance with tax residency requirements and ensure the necessary documentation is in place to claim DTA benefits;
- assess the impact of the tariff and trade provisions established under the CEPA;
- evaluate new business expansion and investment opportunities arising from the bilateral framework;
- consult international tax and trade specialists to ensure the appropriate application of the available benefits.
Auxadi supports multinational groups expanding into Costa Rica through its local office, where a team of specialists provides expert guidance on the tax, legal, and operational aspects of doing business in the country. Contact our international tax experts to discuss your expansion plans.
About Auxadi
With 26 subsidiaries across Europe, the United States, and Latin America, Auxadi is today the leading Spanish accounting firm serving multinational companies and real estate investment funds. Through its technology-driven approach and strong client-focused culture, Auxadi acts as an extension of its clients’ finance departments worldwide, providing accounting, tax, payroll, transfer pricing, and corporate legal services.
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Author:
Leonor Aguilar Segura
Accounting Manager – CR
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All information contained in this publication is up to date on 2026. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.
