I- Summary
September 5, 2025, will mark the official implementation of the 30% tax on foreign agents in El Salvador, under the provisions of the recently approved General Regulations of the Foreign Agents Law (RGLAEX). This regulation not only clarifies who is subject to the tax, but also who may be excluded from it. In this article, we examine the key aspects of the regulation, its tax implications, and what remains pending for its practical implementation.
II- New general regulation of the Foreign Agents Law
On June 2, the General Regulation of the Foreign Agents Law (RGLAEX) was approved and entered into force on June 10, 2025. This regulation clears up several doubts about the application of the controversial 30% tax on foreign agents, a measure that has generated widespread debate in both legal circles and in the field of international cooperation. The main tax aspects clarified by the new regulation are highlighted below:
- Effective date of the 30% tax
Article 23 of the RGLAEX establishes that the 30% tax on foreign transactions and donations received in Salvadoran territory will be payable once the grace period granted by the Foreign Agents Law (LEAX) has expired. This transitional period is 90 days from the entry into force of the law, i.e., from June 7, 2025. Therefore, the tax will become fully applicable as of September 5, 2025.
- Who is outside the scope of the law?
Although the LEAX provides a broad definition of who must register as a Foreign Agent (any natural or legal person acting in the interest, control, or financing of a foreign principal), the Regulations introduce an important limitation.
Article 8 of the RGLAEX clarifies that commercial companies (domestic or foreign) and natural or legal people that carry out strictly commercial activities or activities related to foreign investment will not be considered Foreign Agents or Foreign Principals, provided that these activities remain within the scope of their business purposes. Otherwise, they must register with the RAEX (Register of Foreign Agents).
- Exclusion from the tax regime: an open door
The regulations allow regulated entities to request exclusion from the tax regime through a classification granted by the RAEX. This classification may be:
- Annual.
- For a specific Project.
- Provisional (valid for 20 business days, while the final application is being resolved).
In addition, the RAEX may grant the status of ex officio excluded entity to entities that:
- Operate under international instruments or special laws in force in El Salvador.
- Carry out projects in the areas of health, education, security, development, or other areas of public interest.
- Provide humanitarian assistance, medical services, or other social services.
III- Conclusion
The new General Regulations of the Foreign Agents Law (RGLAEX) introduce key definitions and mechanisms that provide greater clarity and legal predictability to the applicable tax regime, especially about the enforceability of the 30% tax, the definition of obligated parties, and the means of exclusion from the regime. For taxpayers, these regulations represent an important reference point for assessing tax risks and defining compliance strategies.
For any additional questions, please contact our team at taxelsalvador@consortiumlegal.com.