Taxes in Nicaragua

Information on Taxes in Nicaragua

Nicaraguan Property Tax

Property transfers are subject to a 6% transfer tax; the buyer pays 5%, and the seller pays 1%. Property taxes are 1.5%, paid on the assessed value of the property. (Most assessments, in fact, lag behind the actual current values.)

Import Duties

Any amount of local or foreign currency can be imported to or exported from Nicaragua. Visitors are allowed approximately 400 cigarettes, three liters of alcohol, and one large bottle of perfume duty free. Samples with no commercial value are also considered duty free.
As a foreign retiree, you can bring up to $10,000 worth of household goods for your own home duty free.

Income Tax

As a foreign retiree, you pay no taxes on out-of-country earnings. Any income originating from within Nicaragua is taxed at a flat 15%.

Tax Incentives for Retirees in Nicaragua

Nicaragua's retirement laws provide significant tax incentives for foreigners. Follow this link for more information on residency and Nicaraguan tax incentives.

Tax Reductions for Foreign Investors

In March 1999, the National Assembly passed very attractive tax reductions for foreign investors that make Nicaragua one of the most progressive in this area in all of Central America. Among the provisions the law allows for are:

Tax exemptions for NGOs who pursue nonprofit work
Exemptions on import taxes
Exemptions on sales taxes for hospital investments
Lower taxes on the import of U.S. cars whose larger engines were being taxed at a higher rate than those smaller ones in Japanese cars
Elimination of taxes on capital goods, intermediary goods, and raw materials destined for the agricultural sector, small handicraft industry, fishing, and aquaculture.

Though as a foreign investor you can operate your business in Nicaragua without registering it with the government, you'll find that if you do register, you can benefit from various tax incentives. Here's the rundown on what the law provides you when you negotiate an investment agreement with the Ministry of Development, Industry, and Trade:

You can repatriate your net investment, less any losses, three years after your initial investment
You can freely repatriate your profits
You'll receive prompt and appropriate compensation in case your business or property is expropriated for reasons of public utility or social interest
You can negotiate additional tax reductions for your business, granted on a case-by-case basis.

For more information, contact the Ministerio de Fomento, Industria y Comercio (Ministry of Development, Industry, and Trade), Frente al Centro Comercial Camino de Oriente, Managua, Nicaragua; tel. (505)267-0002, 267-0009, fax 267-0041, website: www.economia.gob.ni.

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