Honduras doesn't tax you on where you live. Since 2017 it has taxed only income from economic activity carried on in Honduras. Your foreign pension, the dividends from your portfolio abroad and the gains on assets you hold overseas are all outside Honduran income tax, even once you're resident.
This guide covers Honduran personal tax for people moving to or living in Honduras in the 2026 tax year, which is the calendar year.
The key question is simple. Is your income earned in Honduras, or outside it? That decides almost everything.
What's changed: the Servicio de Administración de Rentas (SAR) raised the 2026 income tax bands by 4.98%, in line with inflation, through Acuerdo SAR-01-2026. The first L228,324.32 of a resident's annual income is now tax free, and the 25% rate starts above L809,660.75. Decree 7-2026, published on 13 February 2026, opened a four-month tax amnesty for obligations missed up to 31 December 2025. The Tax Justice Law (Ley de Justicia Tributaria), published in 2023, would move Honduras back to taxing worldwide income. It is Proposed, not law: the system in force is territorial.
📋 Honduras tax at a glance for 2026
Topic | Details |
|---|---|
Tax year | The calendar year |
Tax system | Territorial: only income from activity in Honduras is taxed |
Top income tax rate | 25% above L809,660.75 a year. The first L228,324.32 is tax free |
All-in on a US$100k salary | About 23% (L2.7 million, including IHSS and RAP contributions) |
Foreign income | Not taxed, including foreign pensions, dividends, interest and gains |
Local dividends and capital gains | 10% each, outside the progressive scale |
Inheritance and wealth tax | None found. Inheritances and gifts are excluded from income tax |
Residence at a glance | Getting in: you live in Honduras and aren't just passing through (no day count in the law). Leaving: you stop living there; we found no exit tax |
Double tax treaties | We found no comprehensive income tax treaty in force |
US dollar figures use L27 to US$1. The Banco Central de Honduras average selling rate for the US dollar was L27.0147 in September 2026.
👉 Banco Central de Honduras: monthly exchange rate series (in Spanish)
The territorial tax system
Image 1 — Honduras only taxes income earned in Honduras
Article 1 of the Tax Code (Decree 170-2016) says that Honduras is governed by the principle of territorial income. SAR explains that this applies tax only to economic activities carried on inside the country, and that it has been the rule since 2017. Before that, Honduras taxed residents on worldwide income, and the 1963 Income Tax Law still contains that older wording.
Not taxed: a foreign pension, dividends and interest from a portfolio held abroad, rent from a property abroad, and gains on foreign assets.
Taxed: a salary for a job done in Honduras, fees for work you do in Honduras, and income from Honduran property, companies and investments.
The grey area is remote work. If you live in Honduras and work for a foreign employer or foreign clients, the work is physically done in Honduras, so it's likely to be treated as Honduran-source. There's no digital nomad law that settles the point.
The territorial rule may not last. SAR published the Tax Justice Law in March 2023, and it has since been before Congress. One of its ten points is to change the principle from territorial to worldwide income, so that income received from abroad is taxed. We found no sign that it has been passed. It is Proposed, not law.
👉 Decree 170-2016, Tax Code, article 1: the territorial income principle (in Spanish)
👉 SAR: the 10 points of the Tax Justice Law, including the move to worldwide income (in Spanish)
What about Próspera and the ZEDEs?
Honduras often appears on low-tax lists because of Próspera, a Zone for Employment and Economic Development (ZEDE) on Roatán with its own tax rules. Congress repealed the ZEDE law in full by Decree 33-2022, published on 26 April 2022. The position of zones set up before the repeal is contested, so we don't treat a ZEDE as a basis for tax planning. This guide and its ratings use the national rules only.
👉 Decree 33-2022: repeal of the ZEDE Organic Law (in Spanish)
When you become tax resident in Honduras
The Income Tax Law defines a resident as a person who currently lives in the country and isn't merely a transient or traveller in Honduras. A non-resident is a person whose residence isn't in Honduras. There's no 183-day or other day-count test in the law. It's a question of fact: where you live.
Residence matters less here than in most countries, because foreign income isn't taxed either way. It decides how your Honduran income is taxed. Residents pay the progressive scale and can claim personal deductions. Non-residents pay a flat tax on gross Honduran-source income instead: 25% on pay for services and on rent, and 10% on dividends and interest.
How you stop being resident
You stop being resident when you no longer live in Honduras. Because there's no day count, keep evidence of your move, such as a new home and residence abroad. If you're registered as a taxpayer and leave for six months or more, the Tax Code requires you to name a representative in Honduras. We found no exit tax for individuals.
👉 SAR: Income Tax Law (Decree-Law 25), consolidated text, articles 5 and 8 (in Spanish)
Income tax rates for 2026
Residents pay income tax on their Honduran-source net income on one annual scale. Salaries are taxed through monthly withholding by the employer.
Honduras income tax rates for 2026 (annual income)
Annual net taxable income | Rate |
|---|---|
Up to L228,324.32 | 0% |
L228,324.33 to L348,154.10 | 15% |
L348,154.11 to L809,660.75 | 20% |
Over L809,660.75 | 25% |
Source: Acuerdo SAR-01-2026, La Gaceta No. 37,051, 23 January 2026.
Residents can deduct up to L40,000 a year for education costs and for fees paid to Honduran health professionals, hospitals and medicines, without receipts. The limit for your own costs is L80,000 if you're over 65. Contributions to pension institutions are deductible too.
Worked example
You're single and work for a Honduran employer in 2026, earning L2.7 million a year (about US$100k), or L225,000 a month.
Your income tax is L582,861 a year: nothing on the first L228,324, then L17,974 at 15%, L92,301 at 20% and L472,585 at 25%.
Your IHSS pension and health contributions are about L595 a month, because they're charged only up to a ceiling of L11,903.13 a month.
Your RAP contribution of 1.5% on the pay above that ceiling is about L3,196 a month.
Your all-in bill is about L628,360 a year, or 23% of your salary, leaving you about L2.07 million. We've ignored the L40,000 deduction, which would save you up to L10,000.
👉 SAR: Acuerdo SAR-01-2026, income tax scale for 2026 (in Spanish)
Freelancing in Honduras
If you work for yourself in Honduras, your net profit is taxed on the same scale, and you file an annual return. Your costs of carrying on your profession are deductible if you can prove them. Honduran companies and other legal entities that pay you fees must withhold 12.5% and pay it to SAR, which counts towards your final bill.
On L2.7 million of net profit (about US$100k), income tax is L582,861, or about 22%. Fees for work you physically do in Honduras are likely to be Honduran-source even if your clients are abroad.
Social security is lighter than in most of the region. The IHSS says self-employed workers can join individually, so membership is voluntary. If you join, you pay contributions on top.
👉 IHSS: frequently asked questions, including individual membership for the self-employed (in Spanish)
Crypto, investments and pensions
Honduran investment income is taxed separately from salaries and profits, at flat rates:
Dividends: 10% on dividends and profit shares paid to residents, withheld by the company.
Capital gains: a single 10% tax, whether or not you're resident, outside the progressive scale.
Non-residents: 10% on Honduran dividends and interest, and 25% on Honduran rent.
Not taxable income: inheritances, legacies and gifts, and pensions.
Foreign investments are a different story. Dividends, interest and gains on a portfolio held outside Honduras come from activity abroad, so they aren't taxed.
Is crypto taxed in Honduras? There's no crypto tax law and we found no SAR guidance. The banking regulator, the CNBS, says Honduran law has no specific regulation of crypto assets, and since February 2024 it has banned banks and other supervised institutions from holding or dealing in them. Gains on crypto held on foreign exchanges or wallets are generally foreign-source and untaxed. A Honduran-source gain could fall under the 10% capital gains tax, and trading as a business in Honduras could be taxed on the scale.
Foreign pensions aren't taxed in Honduras, although the country that pays the pension may tax it. We found no inheritance, gift or wealth tax.
👉 CNBS Circular 003/2024: crypto assets and supervised institutions (in Spanish)
Social security
The Instituto Hondureño de Seguridad Social (IHSS) runs the public pension (IVM) and health (EM) schemes. Under Decree 48-2024, employees pay 2.5% and employers 3.5% for the pension, with the State adding 0.5%. Contributions are charged only up to a ceiling, which was L11,903.13 a month for both pension and health in 2025. From 2026 the IHSS board sets the ceilings after an actuarial study.
The Régimen de Aportaciones Privadas (RAP) collects a further 1.5% from employees and 1.5% from employers on pay above the IHSS ceiling, according to its 2025 notice. Employers also pay other charges on top of your salary.
Pensionados and rentistas who don't work in Honduras have no compulsory contributions that we found. Joining the IHSS as a self-employed person is voluntary.
👉 Decree 48-2024: IHSS contribution rates and ceilings (in Spanish)
👉 RAP: contribution ceilings and percentages for 2025 (in Spanish)
Double tax treaties
Does Honduras have double tax treaties? We found no comprehensive income tax treaty in force. The Tax Code lets the Executive approve treaties to avoid double taxation, and Honduras signed the OECD multilateral Convention on Mutual Administrative Assistance in Tax Matters in July 2022. That convention is about exchanging information, not about relieving double tax.
The lack of treaties matters less than usual, because Honduras doesn't tax your foreign income in the first place. If you earn Honduran income while tax resident elsewhere, your home country's own foreign tax credit rules decide whether you get relief.
Long-stay routes: pensionado and rentista residence
Honduras has no digital nomad visa. If you want to live there long term, the practical routes are residence as a pensionado or a rentista, granted by the Secretaría de Gobernación, Justicia y Descentralización.
Honduras residence routes for 2026
Route | Main requirement | Tax position |
|---|---|---|
Pensionado | A permanent, stable foreign pension of at least US$1,500 a month, paid through a Honduran financial institution; US$300 fee | Foreign pension not taxed |
Rentista | Permanent, stable income of at least US$2,500 a month, from abroad or from Honduras, received through a Honduran financial institution; US$300 fee | Foreign income not taxed; Honduran income taxed |
Both routes need a criminal record certificate, a medical certificate and legalised, translated documents. A remote worker could use the rentista route, but work done from Honduras is likely to be Honduran-source.
👉 Secretaría de Gobernación: requirements for pensionado residence (in Spanish)
👉 Secretaría de Gobernación: requirements for rentista residence (in Spanish)
Who is Honduras good for?
How does Honduras compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including compulsory contributions.
☑️ Who is Honduras good for? Tax ratings for expats in 2026
Expat profile | Honduras rating | Why |
|---|---|---|
Employees | Moderate | About 23% all-in on a US$100k salary for a job done in Honduras: income tax at up to 25% (21.6%), plus IHSS contributions on a low ceiling and 1.5% to the RAP on pay above it. The territorial system doesn't help with a local salary. |
Freelancers (self-employed) | Moderate | About 22% income tax on US$100k of profit from work you do in Honduras. Joining the IHSS is voluntary for the self-employed, so we don't count social security. Truly foreign-source fees aren't taxed, but work you physically do in Honduras is likely to count as local. |
Retirees | Excellent | 0% Honduran tax on a US$40k foreign pension plus US$20k of foreign investment income, because neither is Honduran-source. Pensions are also excluded from taxable income by law. We found no inheritance, gift or wealth tax. |
Crypto gains | Good | No crypto tax law and no published SAR guidance. Gains on crypto held abroad are generally foreign-source and untaxed under the territorial principle, but the position is untested. A Honduran-source gain could be taxed at the 10% capital gains rate. |
Investment income | Excellent | Dividends, interest and gains from a portfolio held abroad are foreign-source, so Honduras doesn't tax them. Dividends from Honduran companies and gains on Honduran assets are taxed at 10%. |
Digital nomad visa | Moderate | Honduras has no digital nomad visa. The practical long-stay route is rentista residence, which needs a stable income of at least US$2,500 a month, from abroad or from Honduras. |
Filing and deadlines
The tax year runs from 1 January to 31 December. You file the annual income tax return between 1 January and 30 April of the following year, or the next working day. The 2026 return is due by Friday 30 April 2027. Returns are filed only through SAR's Oficina Virtual, and you pay with a payment slip generated there, through online banking or at a bank.
If you have only one employer and your tax was fully withheld, you don't need to file.
If you have more than one employer, or salary plus other income, you file and pay any balance.
Tax withheld on Honduran dividends and capital gains is a final, flat tax outside the scale.
Late filing and late payment carry penalties and interest under the Tax Code.
👉 SAR: income tax (ISR) guides, forms and laws (in Spanish)
Frequently asked questions
Does Honduras tax foreign income?
No. Since 2017 the Tax Code has put Honduras on the territorial principle, so only income from activity in Honduras is taxed. Foreign pensions, dividends, interest and gains on assets held abroad aren't taxed, even for residents. A 2023 bill to tax worldwide income is Proposed, not law.
When do you become tax resident in Honduras?
When you live in Honduras and aren't merely passing through. The Income Tax Law has no 183-day or other day-count test, so it depends on the facts of where you live.
What are the income tax rates in Honduras in 2026?
The first L228,324.32 of annual income is tax free. Then 15% up to L348,154.10, 20% up to L809,660.75 and 25% above that. Honduran dividends and capital gains are taxed separately at 10%.
Is a foreign pension taxed in Honduras?
No. It's foreign-source income, and the Income Tax Law also excludes pensions from taxable income. The country that pays the pension may still tax it.
Does Honduras have a digital nomad visa?
No. The practical long-stay routes are pensionado residence, with a foreign pension of at least US$1,500 a month, and rentista residence, with stable income of at least US$2,500 a month.
Can I live tax free in Próspera?
We don't recommend relying on it. Congress repealed the ZEDE law in 2022 and the position of existing zones is contested. Outside the zones, Honduras's national rules apply, which already leave foreign income untaxed.
Where to go next
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Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
