VAT (IVA) in El Salvador

What IVA applies to

• Sales of tangible movable goods, and goods taken from stock for the use of partners, directors or staff.
• Imports of goods and services. On imports the base is the customs value.
• Services of any kind, including technical advice, leases of goods and of commercial real estate, construction contracts, freight and the use of trademarks.

Source: PwC Worldwide Tax Summaries: El Salvador, other taxes¹

Main exemptions

• Housing rent: leases and subleases of real estate for housing.
• Financial services: interest on deposits and loans from local financial institutions, and interest on securities traded through a stock exchange.
• Education and health: authorised educational services, and health services from public institutions.
• Public transport and water supplied by public institutions.
• Insurance premiums covering individuals, and reinsurance.
• Imports of machinery for the fixed assets of registered taxpayers, among other listed imports.

Source: PwC Worldwide Tax Summaries: El Salvador, other taxes¹

Credits and returns

IVA paid on purchases (tax credits) is offset against IVA charged to customers (tax debits) every month. The return is filed within the first ten working days of the following month.¹

Companies in free zones and service parks can be exempt from IVA on their imports and purchases under the incentive laws. See Free Zones.²