Tax
Taxes in El Salvador
El Salvador taxes income on a territorial basis. Companies pay 30% income tax, or 25% when taxable income is $150,000 or less, plus a monthly advance of 1.75% of gross revenue. Sales carry 13% IVA, and income from foreign sources has been outside income tax since March 2024.
Company taxes
| Income tax (ISR) | 30%; 25% if taxable income is $150,000 or less |
|---|---|
| Monthly advance payment | 1.75% of gross revenue, credited against the annual tax |
| Capital gains | 10%; ordinary rates if the asset is sold within 12 months |
| Foreign-source income | Not taxable income since Decree 969 of March 2024 |
Source: PwC Worldwide Tax Summaries: El Salvador, taxes on corporate income; Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish); Legislative Assembly: Decree No. 969 of 12 March 2024 (PDF, in Spanish)1,2,3
Withholding taxes
| Payment | Rate |
|---|---|
| Dividends | 5%; 25% if paid to a listed tax haven |
| Payments to non-residents | 20%; 25% to tax havens; 5% on some items |
Source: PwC Worldwide Tax Summaries: El Salvador, withholding taxes4
Personal income tax
| Residents | 0% to 30%; the first $6,600 a year ($550 a month) is exempt |
|---|---|
| Non-residents | 30% flat on Salvadoran income |
| Employees | Tax withheld monthly under the tables of Executive Decree 10 of 2025 |
Source: Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish); Executive Decree No. 10 of 30 April 2025: income tax withholding tables (Judicial Documentation Centre, PDF, in Spanish)2,5
IVA
| Standard rate | 13% |
|---|---|
| Exports | 0% |
| Exempt | Housing rent, local financial services and some health and education services |
| Monthly return | Within the first ten working days of the following month |
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes; PwC Worldwide Tax Summaries: El Salvador, tax administration6,7
Payroll and property
| ISSS health insurance | Employer 7.5%, employee 3%, on salary up to $1,000 a month |
|---|---|
| AFP pension | Employer 8.75%, employee 7.25%, on the whole salary |
| INCAF training levy | 1% of payroll for employers with ten or more staff |
| Real estate transfer tax | 3% on the value above $28,571.43, paid by the buyer |
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes; Decree 893 of 2023: Law of the Training Institute INCAF, Art. 19 (ILO NATLEX, PDF, in Spanish)6,8
Deadlines
- Tax year: 1 January to 31 December.
- Annual income tax return: by 30 April of the following year.
- Monthly returns: IVA and the advance payment within the first ten working days of the following month.
Source: PwC Worldwide Tax Summaries: El Salvador, tax administration7
Sources
- PwC Worldwide Tax Summaries: El Salvador, taxes on corporate income
- Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish)
- Legislative Assembly: Decree No. 969 of 12 March 2024 (PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, withholding taxes
- Executive Decree No. 10 of 30 April 2025: income tax withholding tables (Judicial Documentation Centre, PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, other taxes
- PwC Worldwide Tax Summaries: El Salvador, tax administration
- Decree 893 of 2023: Law of the Training Institute INCAF, Art. 19 (ILO NATLEX, PDF, in Spanish)
Figures checked 9 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.