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Bolivia: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents are taxed on their Bolivian-sourced income. Married couples are taxed separately.

Bolivian residents can be taxed in two separate ways:

• Individual entrepreneurs (Impuesto sobre las utilidades de las empresas)
• Employees and certain independent individuals (Régimen complementario al impuesto al valor agregado)
  

INCOME TAX

Income earned by individuals is generally taxed at a flat rate of 13%. Income from business and professional activities are taxed at the corporate tax rate of 25%.

The taxable income is gross income less expenses and other deductions. For self-employed professionals, their net income is deemed to be 50% of their gross income; therefore, the effective tax rate for them is 12.5% (25% tax on 50% of gross income).

Taxable income encompasses specifically:

• Rents received from the letting and subletting or other forms of exploitation of immovable or movable property and rights thereon by non-entrepreneurs
• Investment income in the form of dividends, interest, profit sharing, life annuities, life insurance proceeds and any other income from movable capital. Stock dividends are exempt.
• Employment income in the form of wages, salaries and complementary amounts, overtime, profit-sharing, perquisites, incentives, prizes, bonuses, commissions, fringe benefits (including rent-free accommodation, housing and other allowances, allowances for travel and representation expenses) and in general, any ordinary or extraordinary remuneration
• Fees of members of a board of directors or directorate or a supervisory board of companies, and wages of the partners and of the owner of a sole proprietorship
• Any regular income derived by individuals from non-business-related activities.

RENTAL INCOME
Income earned from leasing properties to individuals is taxed at the individual tax rate of 13%.

Income earned from leasing properties to businesses and professionals is taxed at the corporate tax rate of 25%.

CAPITAL GAINS
Capital gains realized from selling real property to individuals are taxed at the individual tax rate of 13%.

Capital gains realized from selling real property to businesses and professionals are taxed at the corporate tax rate of 25%.

PROPERTY TAX

Property Tax (Impuesto a la propiedad de bienes inmuebles)

The property tax is levied on the assessed cadastral value of the property, as determined by the local tax authorities. The tax rates are progressive, depending on the property value.

Bolivia - more data and information

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