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Nicaragua: New Tax Law in Nicaragua

On 1 January 2013, the Government of Nicaragua passed Law Nº 822: 'CONCERTATION TAX LAW'(CTL). This Act and its regulations contain important changes in the tax regime.

Article 3 creates the income tax liability, which taxes taxpayers obtaining any established income (labor income, income from economic activities, capital income and capital gains and losses).

The following definitions were introduced:

  • Resident
  • Permanent establishment
  • The concept of economic unit was deleted

Labor Income
The law exemps the 'Impuesto sobre la Renta' (income tax) from the following labor income related to the particular duties of the employees: travel expenses, communications, vehicles, fuel, depreciation expenses, vehicle maintenance, representation expenses and reimbursement of expenditures.

Income from Economic Activities
Accelerated depreciation
Accelerated depreciation of assets used and involved in the production of exportable goods is available for exporters covered by Act Nº.

382 'Law for temporary admission and active improvement and facilitation of exports'.

In addition to taxpayers covered by Act Nº 382, accelerated depreciation is also available for all taxpayers with less than or equal to twelve million Córdobas (C$ 12,000,000.00) of annual gross income.

Capital Income and Capital Gains and Losses
There is no advance payment on capital income and capital gains and losses. Capital income and capital gains and losses do not have a fiscal period because they are taxed with a final withholding when perceived.

Self-transferred VAT
VAT must be self-transferred by the payer or user of goods and services. This applies to natural or legal persons that are registered with the tax authorities and make payments subject to this collecting mechanism.

Transfer Pricing
The provisions on transfer pricing will be applicable from 1 January 2016.


The full text can be consulted on the following links:
http://www.dgi.gob.ni/documentos/GACETA_241_Ley_822_Ley_de_Concert._Tributaria.pdf
http://www.dgi.gob.ni/documentos/Reglamento_de_la_Ley_822.pdf

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