El Salvador

Corporate - Significant developments

Last reviewed - 30 June 2021

Criteria regarding the consideration of a jurisdiction as a preferential tax regime

In September 2020, the tax administration issued guideline DG-002/2020 by which it is updating previous criteria regarding the consideration of a jurisdiction as a preferential tax regime or a low or no-tax jurisdiction by indicating that any jurisdiction not specifically named in the guide that grants an exemption on income tax (or other taxes with a similar or identical nature) or has such a tax that is inferior by more than 80% of the income tax that would be due in El Salvador will be considered a preferential tax regime or a low or no-tax jurisdiction, as well as holding companies, principal companies, auxiliary or mixed companies, service companies, finance branches, family wealth management companies, headquarters of multinational companies (SEM for its acronym in Spanish), international trusts, companies with which international financial lease contracts are celebrated, and international business corporations, among others.