Withholding Taxes in El Salvador
Rates
| Payment | Rate |
|---|---|
| Payments to non-residents for income from El Salvador, including services used in the country | 20% |
| Payments to entities in listed tax havens | 25% |
| Dividends and distributed profits | 5% (25% to tax havens) |
| International transport, insurance and reinsurance paid to non-residents | 5% |
| Films, music, cable and satellite rights paid to non-residents | 5% |
| Interest on loans to residents | 10%; 20% between related parties |
| Services of resident individuals outside employment | 10% |
| Purchases of intangibles between residents | 5% |
| Non-residents’ income from securities traded on the Salvadoran stock exchange | 0% since April 2026 |
Source: PwC Worldwide Tax Summaries: El Salvador, withholding taxes; PwC Worldwide Tax Summaries: El Salvador, income determination; PwC Worldwide Tax Summaries: El Salvador, significant developments1,3,4
Services used in El Salvador
A service used in El Salvador produces income from El Salvador for the provider, even when the work is done abroad. A foreign consultant, software supplier or group company invoicing a Salvadoran business is therefore normally subject to the 20% withholding.1
Tax havens
The Tax Administration publishes guidelines listing the jurisdictions it treats as tax havens or preferential regimes. A jurisdiction not on the list also counts when its income tax is exempt, or more than 80% lower than the Salvadoran tax would be. Payments to those jurisdictions carry 25%.1
Treaty rates with Spain
The one double tax treaty listed in PwC’s summary is with Spain. It reduces withholding to 10% on interest, royalties and services. Dividends stay at the Salvadoran 5%, and are exempt when paid to a Spanish company holding 50% or more of the Salvadoran company. See double tax treaties.1,5
Frequently Asked Questions
What is the withholding tax on payments to non-residents?
Payments to non-residents for income from El Salvador carry 20% withholding, or 25% when the recipient is in a listed tax haven.
Are services done abroad subject to withholding?
A service used in El Salvador produces income from El Salvador for the provider, even when the work is done abroad, so payments to foreign consultants or software suppliers are normally subject to withholding.
What is the withholding on dividends?
Dividends and distributed profits carry 5% withholding, or 25% when paid to a listed tax haven.
Sources
- PwC Worldwide Tax Summaries: El Salvador, withholding taxes
- Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, income determination
- PwC Worldwide Tax Summaries: El Salvador, significant developments
- PwC Worldwide Tax Summaries: El Salvador, foreign tax relief and tax treaties
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.
