Bolivia

Corporate - Tax credits and incentives

Last reviewed - 02 July 2020

Foreign tax credit

Bolivian legislation does not include provisions regarding recognition of foreign tax credits.

Investment incentives

No incentives are granted in Bolivia for domestic or foreign investment; however, further provisions are expected in this regard due to incoming regulation of Law 516 (Promotion Investment Law).

Export incentives

Export activities benefit from reimbursement of VAT and customs duties paid in the process of producing goods to be exported (with some limitations for oil/gas companies).

Other incentives

Foreign exchange transactions are legal in Bolivia, and a system of free-floating exchange rates exists.

Tourist and lodging services by hotels to foreign tourists without a residence or address in the country are exempt from VAT. In addition, importation of books, magazines, and newspapers are exempted from importation taxes (i.e. VAT), and the sale of produced or imported books are taxed at the zero VAT rate.

International transportation by highway is also exempt from VAT (or subject to 0% VAT rate).

Interest income from public debt through the issuance of securities in external capital markets and the provision of legal, financial, and other advisory services related to the operation of public debt in external capital markets are exempt from CIT.

Regional manufacturing tax incentives

New investments in manufacturing in the states of Oruro and Potosi are entitled to the following tax exemptions:

Exemption Conditions of exemption
Import tariffs and VAT on imported machinery Machinery imported exclusively for the new industry until start-up of operations.
Import tariffs on imported inputs They do not replace domestic inputs of the same kind and are destined to a transformation process. The exemption is granted for the first ten years of operation.
Transaction tax For ten years from the start-up of operations.
CIT For ten years from the start-up of operations if the amount exempt is reinvested in fixed assets in the following fiscal year.