Understanding the tax obligations and complying with the tax laws in Honduras is essential for businesses operating in the country. Corporate income tax, VAT, municipal business tax, excise tax, payroll taxes, withholding tax, and real estate transfer tax are among the key taxes that businesses need to consider. Consulting with a tax professional or referring to the official website of the Honduran tax authority, Servicio de Administración de Rentas de Honduras (SAR), is recommended to stay updated on the latest tax regulations and requirements. By fulfilling their tax obligations, businesses can operate successfully and contribute to the economic growth of Honduras.
Corporate Income Tax:
Honduras imposes corporate income tax on the profits earned by companies operating within its jurisdiction. The corporate income tax rate in Honduras is progressive and based on the level of taxable income. As of the knowledge cutoff date in September 2021, the tax rates are as follows:
- Companies with taxable income up to HNL 350,000: 15%
- Companies with taxable income between HNL 350,001 and HNL 700,000: 20%
- Companies with taxable income over HNL 700,000: 25%
It's important to note that Honduras operates on a worldwide taxation system, meaning that both income generated within the country and income earned abroad by Honduran residents are subject to taxation.
Types of Business Taxes in Honduras:
- Value Added Tax (VAT): Honduras operates a VAT system known as Impuesto sobre Ventas (ISV). The standard VAT rate in Honduras is 15%. However, certain goods and services may be exempted or subject to reduced rates.
- Municipal Business Tax: Municipalities in Honduras may impose a municipal business tax on companies operating within their jurisdiction. The tax rates and specific regulations can vary between municipalities.
- Excise Tax: Excise taxes are levied on specific goods and services, including alcoholic beverages, tobacco products, gasoline, and luxury items. The tax rates can vary depending on the product or service.
- Payroll Taxes and Social Security Contributions: Employers in Honduras are responsible for deducting and remitting payroll taxes and social security contributions on behalf of their employees. These contributions fund the social security system, including pensions, healthcare, and other benefits.
- Withholding Tax: Honduras imposes withholding tax on certain types of payments made to non-residents, such as dividends, interest, royalties, and technical service fees. The withholding tax rates vary depending on the nature of the payment and the residency status of the recipient.
- Real Estate Transfer Tax: A transfer tax is applicable to the sale or transfer of real estate properties in Honduras. The tax rate varies depending on the location and value of the property.
Honduran Tax Authority Website:
For detailed and up-to-date information on business taxes in Honduras, it is recommended to visit the official website of the Honduran tax authority, Servicio de Administración de Rentas de Honduras (SAR).
Servicio de Administración de Rentas de Honduras (SAR) Website: Official SAR Website