The income tax levies the worldwide income of the taxpayer.
Describe rules that determine liability for income tax, such as residency status, source income, trigger points, types of income, tax rates.
Liability for income tax
Individuals that had remained for more than three (3) months in the country are considered residents therefore are obliged to pay income tax. Individuals receiving income from a single source are not obliged to file a tax return to the tax authorities.
Tax trigger points
Every individual resident or not resident in the country, receiving any form of income from Honduran source.
Types of taxable income
Any kind of yield, gain, profit, rent, interest, proceeds, profit, participation, salary, wage, fee and generally any perception in cash, securities, credit or kind that modifies the equity of the taxpayer is considered income.
Natural persons domiciled in Honduras will pay income tax according with the following scale of progressive rates:
|Lps. 110,000.01 to Lps.200,000.00
|Lps. 200,000.01 to Lps. 500,000.00
|Lps. 500,000.01 onwards
Liability for social security
The basis of the calculation for social security payment for each employee recorded in a payroll is 7,000 Lempiras.
- The social security payment rate for the employer is 7.2%
- The social security payment rate for the employee is 3.5%
There are no reciprocal agreements.
Employee compliance obligations
Every taxpayer is required to submit to the Tax Authorities by himself or through an agent or legal representative, from January 1 to April 30 or next business day of each year, a tax return of the income obtained from one or more sources in the previous year. The individuals receiving income that does not exceed 110, 0000.00 Lempiras are exempt of submitting this tax return.
The employer is obliged to withhold the income tax and submit the corresponding tax return when the employee receives income from a single source.
If the employee is not a resident or not domiciled in the country the income received from Honduran source will be subject of 10% tax. The person performing the payments is obliged to withhold, file and pay the amounts to the tax authorities no later than the ten (10) subsequent days of the following month.
Employer reporting and withholding requirements
The employer is obliged to withhold the income tax to the employee only for the paid amounts; the amounts withheld must be filed and paid to the corresponding authorities.
The employer is obliged to perform a monthly withhold of 3.5 % for the social security payment to the employee recorded in a payroll the amounts withheld must be file and paid to the corresponding entity.
The employer is also obliged to withhold to the employee the 1.5% monthly contribution to the Private Contributions Regime (RAP).
These contributions are considered deductible for personal income tax purposes since September 2013.
Double taxation treaties
In Honduras there are no double taxation treaties in force.
Permanent establishment implications
Specific Permanent establishment regulations will become in forced until January 1st 2014.
Transfer pricing regulations will become in forced until January 1st 2014.
Work permit/visa requirements
In order to work in Honduras the non residents must have a work permit.
Local data privacy requirement
Non deductible costs for assignees