Accounting and legal

Accounting and tax

    legal obligations for doing business in El Salvador
  1. The standard corporate tax rate levied on all net profits derived from El Salvador is 30%. The fiscal year is the same as the calendar year and the annual income tax return must be filed by 30th April of the subsequent year, failure to which a penalty will be imposed;
  2. Branches also pay a corporate tax rate of 30%;
  3. The standard VAT rate levied on provision of goods and services in El Salvador is 13% and companies are required to file VAT returns monthly;
  4. Capital gains are taxed at a rate of 10% in El Salvador;
  5. Withholding tax is levied i) on dividends paid to a non-resident company at 5% ii) on interest paid to a non-resident company at 20% iii) on royalties paid to a non-resident company at 20% and iv) on technical services paid to a non-resident company at 20%. These rates may increase to 25% if the recipient is located in a tax haven or benefits from a preferential tax regime;
  6. Capital losses may be carried forward for a period of five years to offset capital gains provided that these losses have been mentioned previously when filing tax returns;
  7. Tax on income from rent of immovable property is levied at the rate of 10%;
  8. Transfer of real estate is subject to 3% tax;
  9. Employers must submit to the relevant authorities social security contributions on behalf of their employees at 7.5%. The employer must also contribute to the private pension funds at the rate of 6.75% monthly;
  10. There are no restrictions imposed on foreign trade operations or foreign currency transactions in El Salvador;
  11. El Salvador’s only income tax treaty is with Spain;
  12. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budget and sensitivity analysis;
  13. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Contact us

For additional information on our accounting and legal services in El Salvador, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
El Salvador central reserve bank El Salvador PROESA El Salvador ministry of foreign affairs El Salvador ministry of finance El Salvador ministry of economy