Nicaragua has a territorial income tax system under which only income generated in, or that causes effects in, Nicaragua is generally subject to income tax. The corporate income tax (CIT) is imposed on a corporation's profits, which consist of business/trading income, and passive income. Capital incomes and capital gains are subject to definitive withholding tax (WHT). General business expenses are allowed as a deduction in computing taxable income. Corporate income tax (CIT) rate CIT is levied only on domestic-sourced income at a flat rate of the higher of: • 30% of net taxable income (i.e. Gross taxable income less allowed deductions), or • a definitive minimum tax of 1% on gross income obtained during the fiscal year.

If the company does not have net income, 30% of net income will not be greater than 1% of gross income. The law establishes the following exceptions to the 1% definitive minimum tax: • First three fiscal periods of recently incorporated entities. For tax purposes, the beginning of business operations is when a company generates taxable income. • Taxpayers whose sales prices are controlled by the government.

• Taxpayers that ceased operations on account of force majeure. • Investments subject to a period of development.

The Treasury Ministry must approve such period. Local income taxes See Municipal sales and services tax in the section.

The law exemps the 'Impuesto sobre la Renta' (income tax) from the following labor income related to the particular duties of the employees: travel expenses, communications, vehicles, fuel, depreciation expenses, vehicle maintenance, representation expenses and reimbursement of expenditures.

If you are thinking of moving to Nicaragua then there is some good news with regards to taxes. Nicaragua does not tax foreign-earned income. You are liable for any income sourced from Nicaragua though. The general rate for non-residents is 15%.

Personal income tax rates * Residents are subject to income tax according to the progressive tax rates shown below: 0 100,000 0 0 100,000 200,000 0 15 200,000 350,000 15,000 20 350,000 500,000 45,000 25 500,000 and above 82,500 30 The corporate tax rate in Nicaragua is 30% or 1% on income over 40 million Cordobas (US$1.48 million) for small to medium sized businesses. Pro Nicaragua is one tax incentive program for investors. Contoh program dengan visual foxpro 6 runtime 10. Under it, you can set up your own free trade zone and enjoy a 10-year tax exemption. Industries targeted by the program include tourism, food processing, outsourcing services, footwear manufacturing, auto-part manufacturing, and forestry. If setting up tax residence in Nicaragua, you should note that Nicaragua has an inheritance tax of 1% to 4% of a property’s registered value. Other tax rates in Nicaragua include: Sales Tax in Nicaragua (VAT) Most goods and services sold in Nicaragua are taxed at a rate of 15%. This is expensive but is offset by the cheaper costs of goods and services in Nicaragua.

Income Tax in Nicaragua Whether you’re a resident of Nicaragua or not all income earned in Nicaragua is subject to income tax. Personal income tax rates for non-residents are a flat 15% on all taxable Nicaragua earned income.

Residents will pay a graduated percentage of tax on all Nicaraguan sourced income, capped at 25%. Both marriage partners are required to report and file separately. The fiscal tax year runs from July 1st to June 30th. Property Taxes in Nicaragua Typically, property taxes in Nicaragua run 1%.

So a purchase of a home at a price of US$100,000 would have an associated annual property tax of $1,000. Rental Income Tax in Nicaragua Rental income in Nicaragua is treated as regular income, so non-residents will pay 15% and residents will pay a maximum of 25%. Deductions to the rental income may apply thereby so the tax rates indicated are based off of taxable rental income only, and not necessarily the full rental income amount. Capital Gains Tax in Nicaragua Capital gains are treated as regular income in Nicaragua, thus the taxable portion is taxed at the same rate. Inheritance Tax in Nicaragua To be filed under occasional gains.

The tax is 1% up to $50,000. From $50,000 to $100,000 the rate is 2%. Anything over $100,000 is 3% inheritance tax.

Tax Incentives Export Tax In Nicaragua Exports of goods or services which have been domestically produced are charged at 0%. Imported goods which are going to be exported are also tax exempt.