Taxation & Residency

Taxation in El Salvador

Taxation in El Salvador is managed by the DGII – the General Office of Internal Revenues – and largely follows the territorial principle, in which only income sourced in El Salvador is taxable.

Applicable Taxes

  • Income Tax: 30% of taxable income. For taxable incomes of less than US $150,000, the income tax is 25%.
  • Capital Gains Tax: 10%
  • Withholding Taxes: The general withholding tax is 20% – 25%. For specific services, there is a reduced withholding tax of 5% or 10%.
  • Dividends/Profits: Withholding taxes of 5%-25% apply.
  • VAT: 13% VAT rate applies; VAT is exempt for goods and services supplied abroad.
 
Tax Residence
Individuals residing in El Salvador are considered tax residents if either their principal source of income is from El Salvador or if they have been more than 200 days in the country per calendar year.
01 Central American Average

Residency & Work Permit

El Salvador has a relatively liberal immigration policy, in particular when related to employment by local companies.

In general, the requirements for a residency & work permit are as follows:

  • Application by the hiring company, including details on the offered job, company details, work contract, etc.
  • Officially translated and apostilled birth and police records
  • Medical record

After 5 years, permanent residency can be obtained, or citizenship. Spanish and Latin American citizens can obtain a permanent residency after only 1 year.

Citizenship

Spanish and Latin American citizens can request citizenship after only 1 year and all other nationalities may obtain it after 5 years of being residents in El Salvador.

Some limitations on dual citizenship currently exist.

El Salvador is in the process of formulating a citizenship by investment program. As soon as this option becomes available, we will be updating the information on this website!

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