El Salvador: Taxes and Costs

Country Rating  »

Home ›  Latin America ›  El Salvador ›  Taxes and Costs

Taxes are generally high in El Salvador

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	22.4%	22.8%	23.8%
Click here to see a worked example
Source: Disclaimer

Income Tax (Impuesto sobre la Renta)

Non-residents are charged 25% tax on net income, including that derived from leasing properties. Depreciation, VAT, and income-generating costs are deductible from the gross income. 20% is withheld at source as advance payment.

VAT (Impuesto a la Transfarencia de Bienes Muebles y a la Prestacion de Servicios)

The Personal Property and Service Tax (or Value Added Tax) was introduced in September 1992. It is levied at 13% for the transfer, importation, and consumption of goods and services including leasing of real estate used for commercial or industrial activities only. Leasing of residential properties, unless it is effectively connected to a business, is not liable for this tax.

Capital Gains Tax

Non-residents are charged 25% tax on capital gains earned from selling property in El Salvador. The taxable gain is computed by deducting acquisition costs, improvement costs, and transaction costs from the transfer or sale price. 20% is withheld at source as advance payment.

Capital gains derived from the sale of property within three years from date of acquisition are exempt from taxation.

El Salvador - more data and information

• Guide to buying houses and registering property sales in El Salvador

Your Comments

Post a comment