Income tax on rent, worked example, in El Salvador
July 26, 2018
|Non-resident couple´s joint rental income1|
|Monthly Rental Income2||1,500||6,000||12,000|
|Annual Rental Income||18,000||72,000||144,000|
|Less 13% VAT3||2,340||9,360||18,720|
|= Taxable Income||7,547||31,570||68,446|
|Income Tax Rates6|
|= Annual Tax Due||2,264||9,471||20,534|
|Annual Income Tax Due||4,604||18,831||39,254|
|Tax Due as % of Gross Income||25.58%||26.15%||27.28%|
Grant Thornton El Salvador is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.
1 The property is jointly owned by husband and wife.
2 Exchange rate used: 1.00 US$ = 8.75 SVC
3 The 13% Value Added Tax (VAT) has to be deducted from the gross rental income before calculating the taxable income.
4 Estimated values.
5 Estimated values.
6 Rental income earned by nonresident individuals is subject to a flat rate of 30%.
7 Value Added Tax (VAT) is payable when leasing property. It is not applied to the income tax liability but is payable over the gross rental income.