The Tax Burden of Companies Central America

On average, companies in the region pay 45.8% tax on profits, while companies in OECD countries pay 41%.

Monday, October 2, 2017

From the study Evolution of the fiscal situation in Central America, by the Federation of Chambers of Commerce of the Central American Isthmus (FECAMCO):

FECAMCO has carried out a study with the objective of showing the fiscal situation in Central American countries and raising awareness in governments about the efficient use of taxes that are collected from the payment of citizens to guarantee solvency of the states.

Taxes paid by companies:

• Companies in Honduras, Costa Rica and Nicaragua pay more taxes on profits than OECD member countries. 

• On average, companies in Central America pay tax of 45.8%, while companies in OECD countries pay 40.9%.

Taxes paid by companies (% of profits):
Guatemala 35.2%
Panama 37.2%
El Salvador 38.8%
Honduras 44.4%
Costa Rica 58.3%
Nicaragua 60.8%

Administrative costs for paying taxes:

• The tax system in countries in the region is less taxpayer friendly than in developed countries.

• Except for Costa Rica, more payments and hours per year are required to comply with tax obligations. 

• In CA, an average of 34 payments are made per year, while in OECD 10 payments are made. 

• In CA, an average of 250 hours a year are allocate for complying with tax obligations while in the OECD countries it is 160 hours.

See presentation "Evolution of the fiscal situation in Central America 2009 - 2016". (In Spanish)

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