Municipal Taxes in El Salvador
How municipal taxes work
- Each municipality issues a progressive tariff, applied to the company’s assets in that municipality.
- Separate tariffs apply to commercial, industrial and financial businesses.
- Taxes are paid monthly. A company with sites in several municipalities deals with each one.
- Municipal tax laws are approved by the Legislative Assembly on the municipality’s proposal.
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes; PwC Worldwide Tax Summaries: El Salvador, tax administration1,4
The 2024 municipal reform
The Special Law for Municipal Restructuring, Decree No. 762 approved on 13 June 2023, grouped the 262 municipalities into 44, keeping the 14 departments. The new councils took office on 1 May 2024. Under the law, the tax laws and ordinances of each former municipality stay in force until the Assembly and the new municipalities ratify, amend or replace them, so rates can still differ district by district.2,3,5
The annual commercial registry fee
| Company assets | Annual fee |
|---|---|
| USD 2,000 to USD 57,150 | USD 91.43 |
| USD 57,151 to USD 114,286 | USD 137.14 |
| USD 114,287 to USD 228,572 | USD 228.57 |
| Each further USD 100,000 of assets | USD 11.43 more, up to USD 11,428.57 in total |
| Each office, branch or agency | USD 34.29 |
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes1
This national fee is paid to the Registry of Commerce each year to renew the business registration. It is separate from municipal taxes.1
Exemptions
Companies under the Free Zones Law and the International Services Law can be exempt from municipal taxes, and beneficiaries of the technology manufacturing law from municipal taxes on their net assets for 15 years.6
Frequently Asked Questions
How do municipal business taxes work in El Salvador?
Each municipality taxes the businesses that operate in it, on a progressive tariff applied to the assets located there. The taxes are paid monthly.
What changed with the 2024 municipal reform?
Since 1 May 2024 El Salvador has 44 municipalities, formed from the former 262, which became districts. The old tax laws stay in force until they are ratified, amended or replaced, so rates can still differ district by district.
Does a company with several sites pay several municipalities?
Yes. A company with sites in several municipalities deals with each one.
Sources
- PwC Worldwide Tax Summaries: El Salvador, other taxes
- Special Law for Municipal Restructuring, Decree No. 762 (vLex, in Spanish)
- UNDP El Salvador: Socio-economic map, a guide to the 44 municipalities (in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, tax administration
- El Diario de Hoy: New councils to decide on district ordinances (in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, tax credits and incentives
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.
