Nicaragua: Worked Example of Tax on Rent
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Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | US$1,500 | US$6,000 | US$12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less Standard Deductions2 | 5,400 | 21,600 | 43,200 | |
| = Taxable Income | US$12,600 | US$50,400 | US$100,800 | |
| Income Tax Rate3 | ||||
| Withholding Tax | 20% | 2,520 | 10,080 | 20,160 |
| Annual Income Tax Due | US$2,520 | US$10,080 | US$20,160 | |
| Tax Due as % of Gross Income | 14% | 14% | 14% | |
Thanks to: |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on April 04, 2009.
Notes
1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).
2 A standard deduction of 30% of the gross rent are available to non-residents earning rental income to account for income-generating expenses.
3 Non-resident individuals earning rental income are taxed at a flat rate of 20%, withheld by the tenant. Only 70% of the rental income earned by non-residents is taxed.
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