Known for its stunning landscapes, rich culture, and growing expat community, El Salvador is becoming an increasingly popular destination for those seeking a new life in Central America.
In this guide, we’ll walk you through everything you need to know about relocating to El Salvador from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
El Salvador follows a territorial taxation model. You will pay tax on local sourced incomes only, irrespective of your resident status.
if you are present in El Salvador on more than 200 consecutive days during the tax year.
if your main source of income arising in El Salvador during the tax year.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in the El Salvador, you may find that the source country, as a starting point, continues to tax the income.
Double taxation agreements may remove the source country’s taxing right and thus, enable you to receive incomes tax free globally.
At present, El Salvador has one double taxation agreement signed.
