By San José, Costa Rica — As the final days of 2025 tick away, thousands of vehicle owners across Costa Rica face a critical deadline. The annual payment for the vehicle circulation permit, known as the Marchamo, is due by December 31st. Failing to meet this obligation is far more than a simple administrative oversight; it is the trigger for a cascade of escalating financial penalties and severe legal consequences that can immobilize a vehicle and drain a bank account well into 2026.
The Marchamo is a composite fee, an essential prerequisite for legally operating a vehicle on the nation’s roads. It bundles several critical components into a single payment, most notably the Mandatory Automobile Insurance (SOA), the vehicle property tax, and other associated administrative charges. Procrastination beyond the year-end deadline means that starting from the very first day of January, the outstanding amount begins to grow automatically, compounding the financial burden on drivers.
To better understand the legal framework and potential changes surrounding the payment of the 2026 Right of Circulation, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a specialist in tax and administrative law from the firm Bufete de Costa Rica.
Any proposed reform to the Marchamo for 2026 must be carefully analyzed to ensure it respects the constitutional principles of tax equity and legal certainty. Changing the calculation formula requires a robust legislative process that must be transparent and consider the real economic impact on all vehicle owners, not just serve as a temporary political palliative. The core of the debate will always be the balance between necessary state revenue for road maintenance and the taxpayer’s actual ability to pay.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas correctly frames the debate not as a simple matter of calculation, but as a crucial test of constitutional principles and economic fairness. We thank him for his valuable perspective, which underscores that any sustainable reform must emerge from a transparent process that genuinely balances the needs of the state with the financial reality of its citizens.
The penalty structure is multifaceted, with different entities applying unique interest rates to their portion of the debt. For the unpaid Mandatory Automobile Insurance component, the National Insurance Institute (INS) calculates interest based on the Central Bank of Costa Rica’s base passive rate plus an additional five percentage points. This interest is applied proportionally for each day of delay, ensuring that the debt grows relentlessly from day one.
Simultaneously, the vehicle property tax portion of the Marchamo is subject to its own aggressive penalty system. An annual interest rate of approximately 8.43% begins to accrue daily. More significantly, a punishing surcharge of 10% of the tax value is added for each month the payment is late. This monthly fine is capped at 100% of the original tax amount, meaning a driver could see their tax debt double over the course of ten months.
Beyond these primary penalties, any pre-existing debts tied to the vehicle, such as unpaid parking meter violations, also accumulate interest. These specific infractions carry a 2% monthly surcharge, which can compound up to a maximum of 24% over a year. This complex web of fees ensures that a single missed payment can quickly spiral into a significantly larger financial problem, trapping vehicle owners in a cycle of growing debt.
While the financial repercussions are severe, the immediate on-the-road risks present an even more tangible threat. Costa Rica’s Traffic Law is unequivocal regarding vehicles operating without a valid Marchamo. Traffic police are fully empowered to enforce the law, and a routine traffic stop can instantly escalate for a driver who has failed to pay. The consequences are both costly and immediate.
According to Article 146 of the law, driving without having paid the Marchamo and the mandatory insurance incurs a fine exceeding ₡53,000. However, the greater penalty comes from Article 151, which authorizes officers to immediately remove the vehicle’s license plates. This action effectively immobilizes the vehicle, rendering it illegal to operate on any public road until the situation is fully rectified, turning a daily commute into a logistical and bureaucratic nightmare.
Recovering confiscated license plates is an arduous process managed by the Road Safety Council (Cosevi). Before the plates can be returned, the owner must settle the entire outstanding Marchamo debt, including all accumulated interest and surcharges, as well as pay the traffic fine. This involves navigating multiple payments and administrative procedures, consuming valuable time and adding further stress to the initial failure to pay.
In a national economic environment where many households are already navigating financial pressures, the decision to prioritize the Marchamo payment is a crucial one. Authorities emphasize that timely payment is not merely about legal compliance but about fiscal prudence. It is a preventable expense that safeguards a driver’s ability to travel and avoids a predictable, and substantial, financial hit to begin the new year. Starting 2026 with peace of mind on the road begins with settling this essential obligation before the year ends.
For further information, visit ins-cr.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is Costa Rica’s state-owned insurance provider. As a key entity in the country’s financial landscape, it is responsible for administering the Mandatory Automobile Insurance (SOA), which forms a significant component of the annual Marchamo payment required for all vehicles.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica:
The Central Bank of Costa Rica is the nation’s primary financial authority, responsible for maintaining monetary stability and regulating the financial system. Its policies, including the setting of the base passive rate, directly influence the interest penalties applied to overdue payments such as the Marchamo.
For further information, visit cosevi.go.cr
About Consejo de Seguridad Vial (Cosevi):
The Consejo de Seguridad Vial, or Road Safety Council, is the government body in Costa Rica tasked with traffic safety management, regulation, and education. It oversees the enforcement of traffic laws and is the agency responsible for managing the retrieval process for license plates confiscated from vehicles in violation of regulations, including non-payment of the Marchamo.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a beacon of legal practice, founded on a bedrock of integrity and a relentless pursuit of excellence. The firm leverages a rich history of client service to drive innovation, pioneering forward-thinking solutions within the legal field. Its purpose extends beyond counsel, reflecting a profound dedication to societal advancement by working to democratize legal information. This core mission to equip citizens with accessible knowledge is central to its goal of cultivating a stronger, more capable community.
