Tax laws Honduras
Honduras has undergone significant tax reforms in recent years, aiming to enhance fiscal responsibility and attract investment.
Income Tax:
Individual Income Tax: Effective from 2025, the Tax Administration Service (SAR) introduced a progressive income tax table, adjusting rates based on the Consumer Price Index variation.
Corporate Income Tax (CIT): Resident companies are taxed at a rate of 25% on their net taxable income. Non-resident companies are subject to CIT only on income derived from Honduran sources.
Alternative Minimum Tax (AMT): Entities with gross income exceeding 1 billion Honduran lempiras (HNL) must pay 1% of their gross income if the calculated CIT is less. Certain sectors, including construction materials and public services, benefit from a reduced AMT rate of 0.5%.
Sales Tax (ISV):
Rates: A standard rate of 15% applies to most goods and services, while an 18% rate is levied on alcoholic beverages, tobacco, and first-class airline tickets. A 4% tourist tax is applicable in specific cases.
Registration and Compliance: Local taxpayers must register for ISV. Sales tax returns are due by the 10th day of each month, with penalties for nonpayment ranging from 5% to 60%.
Recent Developments:
Tax System Reform: In May 2023, the government introduced the Ley de Justicia Tributaria (Tax Justice Law) to eliminate tax loopholes and privileges for certain economic sectors. This reform removed tax rebates for industries such as melon farming and shrimping, leading to protests.
Special Economic Zones (ZEDEs): In September 2024, the Honduran Supreme Court declared ZEDEs unconstitutional. These zones, designed to attract foreign investment with promises of low taxes and minimal regulations, are now prohibited, affecting entities like Prospera, a private city on Roatan Island.
Compliance Requirements:
Registration: Businesses exceeding the VAT registration threshold must register with the Tax Administration Service (SAR).
Reporting: VAT-registered businesses are required to file monthly returns detailing taxable transactions.
Payments: Taxes due must be paid within specified deadlines to avoid penalties and interest charges.
Note: Tax laws and regulations are subject to change. For the most current information, it's advisable to consult Honduras's tax authorities or a tax professional.
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