Income tax on rent, worked example, in El Salvador
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| 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 | |
| Less Expenses4 | (3,113) | (8,570) | (13,720) | |
| Less Depreciation5 | (5,000) | (22,500) | (43,114) | |
| = Taxable Income | 7,547 | 31,570 | 68,446 | |
| Income Tax Rates6 | ||||
| Flat Rate | 30% | 2,264 | 9,471 | 20,534 |
| = Annual Tax Due | 2,264 | 9,471 | 20,534 | |
| OtherTax | ||||
| VAT7 | 13% | 2,340 | 9,360 | 18,720 |
| Annual Income Tax Due | 4,604 | 18,831 | 39,254 | |
| Tax Due as % of Gross Income | 25.58% | 26.15% | 27.28% | |
Notes
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.
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