Taxable income is determined based on the financial statements prepared under Bolivian GAAP, then the income is adjusted for tax purposes in accordance with guidelines provided with respect to non-deductible and non-taxable items.
Inventories must be valued at replacement cost or market value for tax purposes, whichever is lower. Replacement cost is defined as the necessary costs incurred in acquiring or producing the assets as of the year-end, whereas market value is defined as the net value that the company would have obtained for the sale of assets in normal conditions as of the year-end, less commercialisation direct expenses.
Bolivian legislation does not include specific regulations for capital gains. Capital gains must be included in annual CIT if they are considered Bolivian-source income and will be taxed at a rate of 25%.
Dividend income obtained from domestic corporations subject to CIT must be excluded from the net taxable profits of the investor. Dividend income obtained from foreign corporations is not subject to CIT due to the fact that it is not considered Bolivian-source income.
Interest income is subject to annual CIT if loans have been economically utilised within Bolivian territory since associated interest is considered Bolivian-source income.
Law 1546, which approves the government budget for the fiscal year 2024, exempts from CIT interest income from public debt through the issuance of securities in external capital markets.
Rent/royalty income is subject to annual CIT as long as the income comes from an asset situated or economically utilised in Bolivian territory.
Bolivian corporations are taxed only on income generated within Bolivian territory.