The Ministerio de Hacienda administers the national tax system through the Dirección General de Impuestos Internos (DGII), the Dirección General de Aduanas (DGA) and the Dirección General de Tesorería. Municipalities administer separate local taxes under the Ley General Tributaria Municipal and their own ordinances. The Tribunal de Apelaciones de los Impuestos Internos y de Aduanas (TAIIA) hears challenges against final tax assessments and sanctions. The Banco Central de Reserva (BCR) confirms certain foreign financial institutions for tax purposes. The main national taxes are ISR on income, IVA on taxable transfers and services, tax on transfers of real estate, customs duties, specific and ad-valorem taxes, and the special first-registration tax for vehicles. Other statutory contributions include FOVIAL and tourism-related charges. Selective taxes cover products such as alcohol, tobacco, beer, soft drinks, energy drinks, weapons, ammunition, explosives and fuels. The reviewed national framework does not identify a broad personal wealth-tax equivalent. El Salvador generally uses a territorial source approach. Income from property in El Salvador, activities or capital located there, and services used there can be taxable even when payment comes from abroad. A foreign service provider can therefore face Salvadoran tax withholding when its service is used in El Salvador. Tax liability depends on the taxable event, source, residence or domicile and legal status, not simply on citizenship. Resident natural persons generally calculate annual ISR on net income using progressive brackets: income from $0.01 to $4,064 is exempt; income from $4,064.01 to $9,142.86 is taxed at 10% on the excess over $4,064 plus $212.12; income from $9,142.87 to $22,857.14 is taxed at 20% on the excess over $9,142.86 plus $720; and income above $22,857.14 is taxed at 30% on the excess over $22,857.14 plus $3,462.86. Nonresident natural persons, estates and trusts generally face 30% on net income. A person with only salary income normally does not file an annual return unless an exception applies, such as annual salary above $60,000 or missing or incorrect withholding. Employee deductions for health, medical and education expenses follow the legal conditions and require supporting records to be kept for at least six years. Capital gains are generally taxed at 10%; a gain from a sale within 12 months can instead be treated as ordinary income. Dividends and profit distributions generally have a final 5% withholding. Domiciled companies, partnerships and other covered business forms generally pay ISR at 30%, while taxable income of up to $150,000 can qualify for a 25% rate under the applicable rules. The taxable base starts with gross income and subtracts legally admissible costs, expenses and deductions. Covered domiciled businesses generally make monthly advance payments of 1.75% of gross income through F-14. Payments to nonresidents are commonly subject to withholding, with a default rate of 20% and special rates for specified cases such as international transport, certain insurers and reinsurers, qualifying foreign financing institutions and certain audiovisual or intangible rights. Transactions involving preferential or low-tax jurisdictions can generally trigger 25% withholding under Article 158-A, subject to exceptions. IVA is generally 13% on transfers and imports of movable goods and on services. Exports are zero-rated, and eligible exporters can claim input credits or refunds. For imports, the IVA base includes the customs or CIF value, customs duties and applicable specific consumption taxes. A business conducting taxable activity may need IVA registration and an NRC, the taxpayer registration number used for IVA purposes. The tax on transfers of real estate generally applies at 3% to the amount above the statutory exempt threshold, equivalent to $28,571.43. Municipal economic-activity taxes are separate from national DGII taxes, and both their bases and rates vary by Alcaldía. The 2026 calendar includes F-995 for municipal information. Customs duties and IVA can apply to imports in addition to sector-specific taxes. Taxpayers use a NIT or RUC for identification. For Salvadoran adults, the DUI increasingly serves as the NIT through the RNPN and DGII systems. Foreigners generally use a NIT together with a passport or residence card. DGII online services include F-07 for monthly IVA, F-11 for annual ISR, F-14 for monthly advance payments and withholding, F-09 for real-estate transfers, F-10 for first registration, F-982 for related-party transactions, F-944 for capital gains and F-971 for financial statements. Electronic tax documents are governed by Articles 119-A to 119-H of the Código Tributario, with implementation being introduced gradually by the DGII. Monthly IVA returns and payments through F-07 are generally due within the first ten business days of the following month. F-14 follows the monthly tax calendar. The annual F-11 is generally due within four months after the end of the tax year; for income from 2025, the 2026 deadline was April 30. The 2026 calendar set April 7 for the F-982 related-party and preferential-jurisdiction report. A fiscal auditor is generally required when prior-year total assets exceeded ¢10,000,000, approximately $1,142,857.14, or income exceeded 4,817 Comercio y Servicios minimum wages, as well as in cases such as a merger, transformation or liquidation. Appointment is generally made within five months after the prior year ends, notification follows within ten business days, and the fiscal report is normally due by May 31 of the following year. Taxpayers must register and update their information, issue required tax documents, keep accounting records and supporting evidence, and file forms when an obligation applies even if no payment is due. Withholding agents must deduct and remit the required amounts. Eligible exporters can request VAT refunds or credits, and taxpayers can request a written binding consultation. Late filing or payment can produce interest and fines. An approved income-tax installment arrangement generally requires an initial payment of at least 10% and a formal resolution. A taxpayer can challenge a final DGII or DGA assessment or sanction before TAIIA within 15 business days. Cross-border cases can also involve the tax treaty network, including the evidenced treaty with Spain, the Convention on Mutual Administrative Assistance in Tax Matters and Central American tax and customs cooperation. A fiscal domicile certificate is issued by the Ministerio de Hacienda. Related-party transactions and transactions involving preferential or low-tax jurisdictions are subject to transfer-pricing rules under Article 62-A of the Código Tributario. F-982 records the parties, tax numbers, country, relationship, transaction, comparable information, method, range and any adjustment. A separate 30% tax under Decreto No. 308/2025 applies to each financial transaction, disbursement, transfer, in-kind import or other funds received from a foreign principal by a registered Agente Extranjero.
Taxes in El Salvador
El Salvador’s tax system combines national taxes on income, consumption, property transfers, imports and selected goods with municipal taxes on local business activity. Income tax, called Impuesto sobre la Renta or ISR, generally applies to taxable income, while IVA, the tax on transfers of movable goods and services, is 13% on most taxable transactions and 0% on exports. The tax year runs from January 1 to December 31, and registration, invoicing, filing, withholding and payment duties depend on the activity, income source, taxpayer status and municipality.
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