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Please direct all inquiries regarding Honduras to the persons listed below in the San José, Costa Rica, office of EY. All engagements are coordinated by the San José, Costa Rica, office.
San Pedro Sula
EY +504 2580-7921
Boulevard Armenta, Km. 2, N.O. Fax: +504 2580-8007
Altia Business Park Tower 1
San Pedro Sula Honduras
Tegucigalpa
EY +504 2232-9100
Avenida La Pazv Fax: +504 2232-9102
Centro Corporativo Los Próceres Tower 1
Tegucigalpa Honduras
Principal Tax Contact
Rafael Sayagués
+506 2208-9880
(resident in San José, New York: +1 (212) 773-4761 Costa Rica)
Business Tax Services
Lisa María Gattulli
GMT -6
GMT -6
Costa Rica Mobile: +506 8830-5043
US Mobile: +1 (646) 283-3979
Efax: +1 (866) 366-7167
Email: rafael.sayagues@cr.ey.com
+506 2208-9861 (resident in San José, Mobile: +506 8844-6778 Costa Rica)
Email: lisa.gattulli@cr.ey.com
International Tax and Transaction Services – International Corporate Tax Advisory
Juan Carlos Chavarría
+506 2208-9844 (resident in San José, Mobile: +506 8913-6686 Costa Rica) International Mobile: +1 (239) 961-5947
Email: juan-carlos.chavarria@cr.ey.com
Rafael Sayagués
+506 2208-9880 (resident in San José, New York: +1 (212) 773-4761 Costa Rica)
Costa Rica Mobile: +506 8830-5043
US Mobile: +1 (646) 283-3979
Efax: +1 (866) 366-7167
Email: rafael.sayagues@cr.ey.com
International Tax and Transaction Services – Transfer Pricing
Luis Eduardo Ocando B. +507 208-0144 (resident in Panama)
Panama Mobile: +507 6747-1221
US Mobile: +1 (305) 924-2115
Fax: +507 214-4300
Email: luis.ocando@pa.ey.com
Paul de Haan (resident in +506 2208-9800 San José, Costa Rica)
Email: paul.dehaan@cr.ey.com
still open for examination are also subject to advance income tax (AIT) payments that are computed at a rate of 1% of gross income equal to or greater than HNL100 million. The AIT may be credited against the annual corporate income tax, asset tax or the Social Contribution Tax. Branches of foreign companies dedicated to air, land and maritime transport pay the corporate income tax rate of 25% on an amount of net taxable income equal to 10% of their Honduran-source gross income.
(b) Withholding taxes are imposed on payments to nonresident companies and individuals.
(c) This withholding tax applies to payments for films and video tapes for movies, television, video clubs and cable television.
(d) Only companies engaged in agriculture, manufacturing, mining and tourism may carry forward net operating losses.
B. Taxes on corporate income and gains
Corporate income tax. Honduran-resident companies (that is, those incorporated in Honduras) are no longer taxed on their worldwide income. Effective from 1 January 2017, only their Honduran-source income is subject to Honduran tax. Nonresident companies are subject to income tax only on income derived from Honduran sources.
Corporate income tax rates. Companies are subject to corporate income tax at a rate of 25% on their net income.
A Social Contribution Tax of 5% applies to companies with net income exceeding HNL1 million.
A 1% income tax installment applies to taxpayers that meet the following conditions:
• During open tax periods, they have reported operating losses in two consecutive or alternate tax periods.
• In the prior tax period, they derived gross income equal to or greater than HNL100 million.
The installment equals 1% of the gross income reported.
The income tax installment is a tax credit that may be applied against income tax, asset tax or the Social Contribution Tax on the filing of the year-end tax return.
The following taxpayers are not subject to the income tax installment:
• Individuals or entities in the preoperative phase, up to a maximum of five years.
• Companies and individuals that incur losses resulting from an act of God or force majeure. This loss needs to be certified by an audit firm registered with the respective accounting association, notwithstanding a subsequent examination by the tax authorities.
• Companies engaged in agriculture, manufacturing, mining and tourism and individuals authorized by the tax authorities to carry forward losses in accordance with Section 20 of the Honduran Income Tax Law (HN ITL).
• Companies and individuals that calculated and paid tax in the prior tax period and are subject to income tax installments in accordance with Section 34 of the HN ITL.
• Companies and individuals that prove through a tax audit report, carried out by an audit firm registered with the respective accounting association, that the tax loss is real, subject to verification from the tax authorities.
A gain generated from any type of transfer of assets or rights by a person whose ordinary trade does not involve commercializing such assets or rights is considered a capital gain.
However, if the asset being transferred is part of the ordinary course of business of the transferor (for example, the transferor ordinarily or habitually engages in the trade or business of selling shares), the gains are categorized as ordinary income subject to corporate income tax at a rate of 25%.
Capital losses are deductible only if derived from the sale of depreciable assets or from the sale of non-depreciable assets sold in the ordinary course of a trade or business.
The capital gain must be reported and the corresponding tax paid for each transaction within 10 working days following the date on which the payment is received by the seller. An annual return must also be filed by 30 April of each year.
For the transfer of immovable property or rights and securities carried out with a nonresident, the buyer must withhold 4% of the transfer value. The capital gains tax is deemed to constitute a credit to such tax for the seller. The tax withheld must be reported in a filing and paid by the buyer within 10 calendar days following the date of the transaction.
Administration. The regular statutory tax year runs from 1 January through 31 December. However, taxpayers may elect a different tax year by requesting an authorization from the tax authorities. Companies with a regular statutory tax year must file an annual income tax return and pay any corresponding tax by 30 April of the of the next calendar year. For companies with a different tax year, the filing and payment deadline is 90 days after the end of their tax year. Mandatory advance tax payments are payable each quarter based on the income tax liability for the preceding tax year.
Dividends. A 10% withholding tax is imposed on dividends.
Foreign tax relief. Honduras does not grant any relief for foreign taxes paid.
C. Determination of taxable income
General. Net taxable income is computed in accordance with generally accepted accounting and commercial principles, subject to certain adjustments required by the Honduran income tax law.
Inventories. Inventories are valued using the first-in, first-out (FIFO), last-in, first-out (LIFO) or weighted average cost methods.
Provisions. Provisions for contingent liabilities, such as severance pay, are not deductible for tax purposes. However, payments of such liabilities are deductible expenses. In contrast, provisions for bad debts are deductible, as long as the amount of the provision does not exceed 10% of the amount of accounts receivable from customers at the end of the fiscal year.
Tax depreciation. Depreciation may be computed using the straightline method. Companies may obtain authorization from the tax authorities to use other depreciation methods. However, after a company selects a depreciation method, the method must be
applied consistently thereafter. The following are the applicable straight-line method rates for some common assets.
Relief for losses. Companies engaged in agriculture, manufacturing, mining and tourism may carry forward net operating losses for three years. However, certain restrictions apply. Net operating losses may not be carried back.
Groups of companies. Honduran law does not allow the filing of consolidated income tax returns or provide any other tax relief to consolidated groups of companies.
D. Other significant taxes
The following table summarizes other significant taxes.
Property tax; imposed on companies owning real estate Various Industry trade and service municipal tax; imposed monthly on income derived from the operations of companies; rates
E. Foreign-exchange controls
The Honduran currency is the lempira (HNL).
No restrictions are imposed on foreign-trade operations or foreign-currency transactions. As of 1 March 2024, the exchange rate for the lempira is HNL24.79 = USD1.
F. Tax treaties
Honduras has not entered into any income tax treaties with other countries.