Fiscal Trends in Central America

The Central American region has been characterized by a very dynamic economic, political and social development, which has permeated the design of fiscal policies in each country. Under this reality, the tax component is consolidated as one of the most important elements of analysis for those who do business in the region, given the development of a constant local tax collection maelstrom.

Central America is usually considered as an economic unit, but with the enormous particularity that it has not only very different local idiosyncrasies, but also legal frameworks and tax systems that are independent and different from each other. Although there is some similarity between some local tax elements, the absence of harmonized regional regulations makes it necessary to take into consideration the specifics of each tax system, as well as the specific local practice.

Given this reality, Consortium Legal has established itself as the leading firm in the Central American region. With more than 200 professionals in our offices located in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica, we have developed a client-centric culture of service, in order to be strategic allies in the undertakings and businesses that take place in the region. This vocation has been developed with special care in our regional tax practice, with work teams in each of our countries made up of widely recognized professionals in the legal, accounting, financial and economic areas, in order to provide an interdisciplinary and regional approach for the benefit of our clients.

Therefore, we present this publication prepared by our team, which aims to guide you through the dense path of understanding and applying the tax provisions in each of our countries. In this way, the reader will find below a general description of each of the tax systems, as well as of the Tax Administrations of each country, with an emphasis on the tax perspectives that we observe for this year.

We have also developed the most relevant issues that every businessman and entrepreneur should consider when conducting business in the region, based on the most recent pronouncements of the Tax Administrations or the Courts of Justice on issues such as Transfer Pricing, Territoriality or Exchange Differential, as well as the main trends in some other issues such as Employee Benefits, Tax Amnesties or Criminal Complaints.

With this publication we make available to the business community the experience and knowledge of the interdisciplinary team of the regional tax practice of Consortium Legal. We are sure that prevention and adequate preparation will be the best strategy we can offer in the face of a particular regional reality, and a convulsive and uncertain global economy.

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