Indirect taxes, such as import duties, contribute about three-quarters of government revenues.
Both individuals and businesses residing in Costa Rica are subject to income tax only on income derived from sources within the country. The corporate tax rate is 30%; incentives are available for new industries and for engaging in the export of nontraditional products. Personal income taxes range from 10%–25% for employed persons and 10%–20% for self-employed persons. The personal exemption level is equal to only 80% of Costa Rica's average income, and the threshold for the highest tax rate is less than four times the average. The main indirect tax is Costa Rica's value-added tax (VAT) introduced in January 1975 at a standard rate of 10%, which was reduced to 8% during the 1990's, and then raised to 13% in 2001. There is also a property tax, a franchise tax, a real estate transfer tax, and a selective-consumption tax levied on luxury items, with rates ranging from 10% to 75%.