Reclassification for Taxpayers in Honduras 2023

Tegucigalpa MDC, May 26, 2022, the SAR (Servicio de Administración de Rentas – Revenue Administration Service) announced the new classification for taxpayers through Agreement SAR-125-2022, which will allow for greater control over the large and medium-sized enterprises that generate close to 80% of the tax collection of the State of Honduras.

The Tax Administration has documented and designed classification criteria for taxpayers to manage taxpayers correctly. In this regard, the following segment briefly shows each of the criteria included in the taxpayer classification methodology.

Criterion No. 1: Collection of Internal Taxes

This criterion identifies those taxpayers participating in 80% of the tax collection, obtaining a value in its classification if within this group that supports a high percentage of tax revenues.

Criterion No. 2: Gross Income

The administrative data of the Income Tax Returns identifies the taxpayers’ gross taxable income and generates a calculation to assign a higher score to those TOs that concentrate a greater amount of income.

Criterion No. 3: Income Tax Debit

This criterion identifies those taxpayers whose sales levels generate high tax debits.

Criterion No. 4: Imports of Goods

Data on imports of goods from the DUCA (Declaración Única Centroamericana – Single Central American Declaration) is used to determine the capacity of a taxpayer in terms of foreign trade.

Criterion N° 5: Total Assets

In order to determine the amount of a taxpayer’s investment and its installed capacity, the Total Net Assets declared in the Income Tax (IT) for Legal Entities (LE) and the Total Assets for Individuals (IN) are considered an indicator of the taxpayer’s investment in the country.

Criterion N° 6: Withholding Agents

This criterion classifies taxpayers designated as withholding agents for the various tax codes, and based on the amount withheld and paid to the tax authorities, they are given weight within the classification.

Criterion No. 7: Strategic Variables

For this criterion, four variables of tax transcendence were identified: The segment of greater tax risk, the concentration of information, tax expenditure, and employment generation.

The changes in the category of taxpayers consider 721 as large taxpayers, of which 260 maintain their category, 194 medium-sized and 267 small taxpayers become large taxpayers, as shown below:

The update to the classification of taxpayers applied as of January 1, 2023. Therefore, the tax administration published the list of all large and medium taxpayers to adapt their systems and be prepared for the new tax obligations.