Tax in Honduras

Who is the tax authority?

Servicio de Administracion de Rentas (SAR) is Honduras's tax authority. SAR is an autonomous agency under the Secretaria de Finanzas (SEFIN). Customs is administered jointly with SAR.

Filings flow through eSAR, the online portal. SAR maintains specialized offices for Grandes Contribuyentes (large taxpayers) and regional administrations. Tax disputes move through SAR internal review (recurso de reposicion), the Tribunal Tributario Nacional, and the Corte Suprema de Justicia for cassation.

The principal credentialed accounting and tax profession is Contador Publico, regulated by the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CCPH). The core statutory framework rests on Decreto 25-1963 (income tax), Decreto 24-1963 (sales tax), and the Codigo Tributario Decreto 22-97.

What is the tax year and when are returns due?

The Honduran tax year is the calendar year (1 January to 31 December). Annual ISR returns for individuals and corporations are due 30 April of the following year.

Monthly obligations run throughout the year. ISV returns are due by the 10th of the following month. Withholding tax returns are monthly. The IAN (net assets tax) runs on quarterly instalments with annual reconciliation.

Employers withhold ISR monthly from wages. Employees with only wage income largely satisfy their obligations through employer withholding, but self-employed workers file annually and reconcile quarterly estimates.

Who counts as a Honduran tax resident?

Under the Codigo Tributario, an individual is tax resident in Honduras if either rule applies:

• Present in Honduras for more than three consecutive months; or
• Present for more than six months in any calendar year; or
• Maintaining a main centre of business or economic interests in Honduras.

The three-consecutive-month rule is unusually low compared to Latin American peers. Extended-stay visitors can inadvertently cross the threshold. Regardless of residency status, Honduras taxes on Honduran-source income — residents and non-residents alike pay ISR on Honduras-source income only, with limited exceptions.

What are the personal income tax rates?

Honduras applies a four-bracket progressive ISR structure above an exempt threshold.

A personal allowance of HNL 40,000 applies as a standard deduction, plus HNL 700 per month for medical and educational expenses. Investment income (interest from financial institutions) faces 10% withholding. Capital gains are taxed at a flat 10% under specific statutory provisions.

Mandatory social contributions also apply. The Instituto Hondureno de Seguridad Social (IHSS), FOSOVI, RAP, and INFOP contributions come out of wages on top of ISR.

How does corporate tax work?

Honduras's corporate ISR is 25% on Honduran-source taxable profit. A 5% Aportacion Solidaria surcharge applies on net taxable income above HNL 1,000,000, making the effective rate 30% for higher-income entities.

Withholding tax on dividends to non-residents is 10%. Royalties and technical-services fees face 25% default withholding. Interest withholding ranges from 10% to 25% depending on counterparty class. Pillar Two global minimum tax has not been transposed. Tax loss carryforward is restricted — generally unavailable except for the industrial sector for up to 3 years.

What about ISV and indirect taxes?

Honduras's ISV (Impuesto sobre Ventas) operates on a VAT-style invoice-credit mechanism under Decreto 24-1963, though formally called a sales tax. The standard rate is 15%.

ISV registration is mandatory regardless of turnover for businesses subject to ISV. There is no revenue-threshold exemption equivalent to other jurisdictions. Monthly ISV returns are due by the 10th of the following month.

Foreign digital service providers selling B2C into Honduras must register under successive amendments to the ISV law. The Comprobantes Fiscales Electronicos (CFE) electronic invoicing framework has been progressively expanded since 2014. Excise duties apply on specified luxury goods. Customs-ISV is collected at the border on imports.

How are cryptoassets treated?

Honduras has not enacted a dedicated cryptoasset tax framework. Banco Central de Honduras (BCH) issued Resolucion 215-7/2022, stating that cryptoassets are not legal tender and are not regulated as financial instruments.

The post-ZEDE regulatory environment adds complexity. Prospera ZEDE on Roatan had developed a crypto-friendly sub-framework before the 2022 ZEDE law repeal. That parallel framework has been progressively unwound under the Castro administration. No replacement framework exists as of 2026.

ZEDE framework — repeal and legal contention

Honduras's ZEDE (Zonas de Empleo y Desarrollo Economico) framework was created in 2013 as an experimental special economic zone model. ZEDEs operated with significant regulatory and tax autonomy — nearly a parallel legal system within Honduras.

The ZOLI and ZADE free-trade zone frameworks remain in operation and are separate from the repealed ZEDE law. Export-oriented maquila operations in ZOLI and ZADE zones continue to access tax holidays.

What is the treaty network?

Honduras has one of the thinnest bilateral tax treaty networks in Latin America. Approximately two comprehensive DTAs are in force as of 2026 — Mexico and Spain. There is no income tax treaty with the United States.

Honduras has not signed the OECD Multilateral Instrument (MLI). Honduras participates in the Common Reporting Standard (CRS) framework under successive amendments — financial accounts are exchanged with partner jurisdictions for tax purposes. Honduras is not an OECD member and has not adopted Pillar Two.

What is the currency framework?

Honduras uses the Honduran Lempira (HNL) as its official currency. The Lempira operates on a managed float effectively linked to the US Dollar over the medium term.

Large Honduran diaspora remittances from the United States make the USD-HNL rate economically significant. Tax obligations are denominated and settled in HNL. Foreign-currency transactions are converted at BCH reference rates for ISR and ISV purposes.

Where does Honduras sit in the Central American cohort?

Honduras sits in the CAFTA-DR + Central American income-tax cohort alongside Guatemala, El Salvador, Nicaragua, Costa Rica, Panama, and the Dominican Republic.

CAFTA-DR: free trade is not an income-tax treaty

Honduras joined CAFTA-DR (the Dominican Republic-Central America Free Trade Agreement with the US) in 2006. CAFTA-DR reduces tariffs on goods and services between Honduras and the United States. It does not reduce withholding tax rates on dividends, interest, or royalties passing between the two countries.

Honduras is also a member of SICA (Sistema de Integracion Centroamericana) and the Central American Common Market (CACM). These regional bodies create trade and regulatory harmonization but do not carry income-tax treaty effects.

Common pitfalls for foreign nationals and businesses

Operating in Honduras surfaces a concentrated set of recurring traps:

When should you contact a Honduras tax pro?

Some Honduran tax situations are manageable through SAR eSAR online services. Others benefit significantly from qualified guidance:

You can find vetted Honduras tax practitioners in the directory below.

This page is general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the SAR website or with a licensed Honduras practitioner before filing.