By San José, Costa Rica — San José – The National Insurance Institute (INS) has announced that Costa Rican vehicle owners can begin paying their 2026 mandatory circulation permit, known as the marchamo, starting Monday, November 3, 2025. This annual payment is a prerequisite for legal vehicle operation within the country and must be completed by the strict deadline of December 31, 2025, to avoid significant financial penalties and legal repercussions.
The total amount due for each vehicle will also be available for consultation on the November 3rd start date. The marchamo is not a single tax but a composite fee that bundles several critical obligations into one payment. The largest portion for most drivers is the vehicle property tax, which is calculated annually based on the fiscal value of the car, truck, or motorcycle. This tax is a significant source of revenue and is adjusted each year.
To better understand the legal and tax implications surrounding the annual ‘marchamo’ payment for 2026, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a legal expert from the prestigious firm Bufete de Costa Rica, who provided his analysis on the matter.
The annual debate over the Marchamo highlights a persistent issue in our tax system: the lack of transparency and technical modernization in the fiscal valuation of vehicles. A fair and predictable calculation is not just a matter of public finance; it is a principle of legal certainty for the citizen. Any future reform must prioritize a clear methodology that eliminates the discretion and annual surprises that erode public trust.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, Lic. Larry Hans Arroyo Vargas masterfully articulates that the annual Marchamo debate is a symptom of a deeper issue: the erosion of public trust through fiscal uncertainty. His emphasis on a transparent and predictable methodology as a cornerstone of legal certainty is a critical reminder for any future reform. We sincerely thank him for lending his valuable perspective to this important discussion.
In addition to the property tax, the payment includes the Mandatory Automobile Insurance (SOA), which provides up to ₡6 million in coverage for injuries or death to vehicle occupants in the event of an accident. The total fee also incorporates sales tax on the SOA, contributions to the Road Safety Council (Cosevi), a public transport canon where applicable, and any outstanding traffic violations tied to the vehicle. Finally, minor stamp taxes for wildlife conservation and the Scout Association are included.
A notable concern for drivers this year is the substantial increase in the cost of the SOA component. The General Superintendency of Insurance (Sugese) approved the new rates on October 3rd, revealing a weighted average premium increase of 10.15%. The average cost will climb from ₡39,782 in the 2025 period to ₡43,819 for the 2026 permit, representing an average jump of ₡4,037 per policy. This increase will be felt more acutely by certain vehicle classes, with private cars seeing a rise of over ₡4,000 and motorcycles facing an even steeper hike of more than ₡5,000.
Officials attribute this sharp rise in insurance premiums directly to the deteriorating safety conditions on Costa Rica’s roads. The calculation for the SOA is heavily influenced by the frequency and severity of traffic accidents, including the number of injuries, fatalities, and the associated medical and administrative costs. As road violence and accident rates have climbed in recent years, the financial burden has been passed on to all vehicle owners through higher mandatory insurance costs.
The consequences for failing to meet the December 31st deadline are severe and multi-faceted. The INS has outlined a clear structure of penalties for late payment. The SOA portion accrues interest based on the annual basic passive rate plus five percentage points. Outstanding traffic infractions are subject to a staggering 36% annual interest rate, while parking meter fines accumulate at 2% per month. Furthermore, the vehicle property tax component will incur interest at a rate of 8.35% annually, or 0.02287% per day.
Beyond the compounding financial charges, drivers who fail to pay the marchamo on time risk direct enforcement action from traffic police. Authorities are empowered to issue fines and can legally seize the vehicle, removing it from circulation until the outstanding balance and all associated penalties are paid in full. This can lead to a lengthy and expensive process to recover the vehicle.
As the new payment period approaches, data from the INS shows that compliance for the current 2025 period is high but not complete. As of the report, 1,742,961 vehicles have successfully paid their circulation rights. However, 142,093 vehicles remain delinquent, with the majority of these being motorcycles, scooter-style bikes (bicimotos), and private passenger cars. Vehicle owners are urged to consult their amount due on November 3rd and plan their payment to ensure legal compliance for the upcoming year.
For further information, visit ins-cr.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is the state-owned insurance company of Costa Rica. Founded in 1924, it held a monopoly on the insurance market until 2008. Today, it remains a dominant force in the industry, offering a wide range of insurance products including life, health, auto, and property. The INS is also the primary entity responsible for managing the collection of the annual vehicle circulation permit, or marchamo.
For further information, visit sugese.fi.cr
About Superintendencia General de Seguros (Sugese):
The General Superintendency of Insurance is the official body responsible for the authorization, regulation, and supervision of insurance companies, intermediaries, and related activities in Costa Rica. Sugese works to ensure the stability and efficiency of the insurance market, promoting transparency and protecting the interests of policyholders. It is the entity that reviews and approves the annual rates for the Mandatory Automobile Insurance (SOA).
For further information, visit cosevi.go.cr
About Consejo de Seguridad Vial (Cosevi):
The Consejo de Seguridad Vial, or Road Safety Council, is the Costa Rican government agency tasked with planning, directing, and controlling measures to improve road safety and reduce traffic accidents. Cosevi’s responsibilities include driver education, traffic law enforcement oversight, vehicle inspections, and managing road safety projects. A portion of every marchamo payment is allocated to fund Cosevi’s critical initiatives.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a pillar in the legal community, operating on a bedrock of principled counsel and superior service. With a rich history of guiding clients through complex challenges across numerous industries, the firm consistently pioneers innovative legal solutions. This forward-thinking approach is matched by a profound sense of social responsibility, manifested in a core mission to demystify legal concepts and empower the public with knowledge, thereby strengthening the foundations of a just and well-informed society.
