El Salvador Tax Rates
El Salvador operates a territorial tax system administered by the Dirección General de Impuestos Internos (DGII). Only Salvadoran-source income is taxable. Personal income tax is progressive with a top rate of 30%, the corporate rate is 30%, and VAT (IVA) is 13%. El Salvador made history in 2021 by becoming the first country to adopt Bitcoin as legal tender.
Top Income Tax Rate
30%
Corporate Tax Rate
30%
VAT / Sales Tax
13%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
El Salvador imposes a progressive personal income tax with four brackets from 0% to 30%. Only income sourced within El Salvador is taxable under the territorial system. The exempt amount is approximately USD 4,064 annually. Employment income is subject to monthly withholding. El Salvador uses the US dollar as its official currency (since 2001), and Bitcoin is also legal tender (since 2021).
| Income Range | Tax Rate |
|---|---|
| $0 – $4K | 0% |
| $4K – $9K | 10% |
| $9K – $23K | 20% |
| $23K+ | 30% |
Corporate Tax
El Salvador imposes a 30% corporate income tax on Salvadoran-source income. Companies in free trade zones enjoy income tax exemptions for 15-20 years. An alternative minimum tax of 1.75% on gross assets may apply when it exceeds the regular income tax.
Standard Rate
30%
Capital Gains Tax
Capital gains from the sale of assets in El Salvador are taxed at a flat 10% rate on the net gain. This applies to real estate, shares, and other capital assets.
Rate
10%
VAT / Sales Tax
El Salvador levies a 13% IVA on most goods and services. Basic food items, medicines, educational services, and exports are exempt or zero-rated. Monthly IVA returns are required.
Standard Rate
13%
Cryptocurrency Tax
El Salvador became the first country to adopt Bitcoin as legal tender in September 2021 (Bitcoin Law). Capital gains from Bitcoin transactions by individuals are exempt from tax. Businesses must accept Bitcoin as payment. The government has purchased Bitcoin for national reserves and established a Bitcoin wallet (Chivo). Other cryptocurrencies are not legal tender and would fall under general tax rules.
Tax Treaties
El Salvador has very few double taxation agreements, with a treaty with Spain being the primary one. The country participates in some international tax transparency initiatives.
Treaty Network
1
Double taxation agreements
Major treaty partners:
Key Details
Relocate to El Salvador
See how much you could save by moving here from your current country.
$-9,282
Tax in United States
$24K
24.4% effective
Tax in El Salvador
$34K
33.6% effective
Additional Cost
38.1%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
