The Tax Regime in Honduras

February 1, 2021

The tax system in Honduras is governed by a system based on the principle of territoriality of income for both natural and legal persons.

This regime includes direct and indirect taxes and even special regimes for customs matters when no special regimes for micro or small businesses.

This article provides information on the main aspects of the tax regime in Honduras and the special customs regimes.

Income Tax on Legal Entities

According to the Income Tax Law, this tax is levied on any type of income derived from work, capital, or a combination thereof.

In this case, the corresponding rate for this type of person under Article 22 of said law is 25% is calculated on the taxable base, being the latter constituted by the gross income minus the deductions allowed by this law.

In the case of legal entities, the tax is paid through quarterly advances, due on June 30, September 30, and December 31, being the last payment of the tax return on April 30 of each year.

Net Assets Tax

Legal entities domiciled in Honduras must be taxed at a rate of 1% on the value of their net assets, which appear in the said of this minus the deductions allowed by law.

Tax on employees and individuals

In this case, the withholding shall be applied for those natural persons who have received income in a fiscal period for an amount exceeding L.165,482.06. The applicable rate for this will depend on a progressive scale, whereby rates from 15% to 25% may be applied.

Special Regimes

Honduras has different special regimes, two of the most important being the “Free Trade Zone” and the RIT (Régimen de Importación Temporal – Temporary Import Regime).

Free Trade Zone

It aims to establish a free trade zone in Honduras for companies to engage in export.

To obtain this benefit, a permit must be requested from the Secretariat of Economic Development. Among the benefits of this regime are the exemption from customs payment, domestic, excise, and other taxes that could be levied on the goods in the free zone.

Temporary Import Regime (RIT)

Under this regime, the aim is to encourage companies to export, even those not having benefited from another law.

These benefits include the suspension of customs duties and other import taxes related to raw materials and samples. It also exempts the payment of income tax related to profits from the export of goods to non-Central American countries.