Double Tax Treaties of El Salvador
The treaty with Spain
| Payment from El Salvador to a Spanish resident | Withholding |
|---|---|
| Dividends | 5% under Salvadoran law (treaty cap 12%); exempt to a Spanish company holding 50% or more |
| Interest | 10% |
| Royalties and rent | 10% |
| Services | 10% |
Source: PwC Worldwide Tax Summaries: El Salvador, withholding taxes3
The treaty covers taxes on income and on wealth. In El Salvador that means income tax. Spain relieves double taxation by credit for Salvadoran tax paid, and El Salvador by credit for Spanish tax, where it taxes foreign income.2
Without a treaty
- Taxes paid abroad do not qualify for a tax credit in El Salvador.
- Since Legislative Decree No. 969 of 2024, income from foreign sources is not income for Salvadoran tax purposes, which removes much of the double taxation a treaty would address. See foreign-source income.
- Payments from El Salvador to non-residents carry the normal 20% withholding, or 25% to tax havens.
Source: PwC Worldwide Tax Summaries: El Salvador, foreign tax relief and tax treaties; Legislative Assembly: Decree No. 969 of 12 March 2024 (PDF, in Spanish); PwC Worldwide Tax Summaries: El Salvador, withholding taxes1,4,3
Frequently Asked Questions
Which double tax treaties does El Salvador have?
The double tax treaty listed for El Salvador in PwC’s tax summary is with Spain, signed in Madrid on 7 July 2008 and in force since 13 August 2009.
What withholding applies under the Spain treaty?
Under the treaty, interest, royalties and services carry 10% withholding. Dividends carry 5% under Salvadoran law, within a treaty cap of 12%.
Are foreign taxes credited without a treaty?
No. Taxes paid abroad do not qualify for a tax credit in El Salvador, but since 2024 most foreign-source income is outside Salvadoran income tax.
Sources
- PwC Worldwide Tax Summaries: El Salvador, foreign tax relief and tax treaties
- Boletín Oficial del Estado: Spain–El Salvador double tax convention, BOE-A-2009-9325 (in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, withholding taxes
- Legislative Assembly: Decree No. 969 of 12 March 2024 (PDF, in Spanish)
Figures checked 8 November 2026. Prepared by InvestSalvador.com for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.
