Sales tax is charged on all sale and purchase transactions of goods and services made in Honduran territory.
The general sales tax rate is 15%. It applies to most goods and services, with the exception of machinery and equipment, basic grains, pharmaceutical products, raw materials for the production of non-taxable goods, petroleum products, school supplies, and insecticides, among others.
The import and sale of beer, other alcoholic beverages, cigarettes, and other tobacco products are subject to 18% sales tax.
There is a 15% sales tax applicable to some PCS, cellular, internet broadband, cable TV, and energy services, depending on the amount of consumption billed by the supplier.
There is an 18% sales tax levied on first class and business class air tickets.
The duty assessed by the Honduran government at the time of customs clearance ranges between 0% and 15% for most items.
Honduras is a member of the Central American Common Market (CACM), which also includes Costa Rica, El Salvador, Guatemala, and Nicaragua. Honduras’ rates on most goods from outside CACM are currently within the 0% to 15% range. Under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) with the United States (US), about 80% of US industrial and commercial goods can enter the region duty-free, with the remaining tariffs to be phased out over ten years. Nearly all textile and apparel goods that meet the Agreement’s rules of origin are duty-free and quota-free, promoting opportunities for US and regional fibre, yarn, fabric, and apparel manufacturing (the Agreement’s tariff treatment for textile and apparel goods was made retroactive to 1 January 2004).
It is necessary to first obtain the appropriate Harmonized System (HS) classification number for determining when a particular product can enter the CAFTA-DR region duty-free. With this number, it is then possible to check the country and product-specific tariff elimination schedule.
Ad valorem import taxes can be as high as 20%. In addition, imports are subject to the sales tax of 15% or 18% that applies to the sum of the cost, insurance, and freight (CIF) value, the ad valorem duty, and the customs fees.
There is an excise tax levied on the production and importation of cigarettes, sodas, beer, and alcoholic beverages.
Cigarettes are levied at HNL 433.12 per thousand units.
Excise tax on sodas, beer, and alcoholic beverages are levied according to the following table:
|Description||Tax rate per litre (HNL)|
|Soda/other prepared drink||0.72|
|Brandy, cognac, vermouth||34.55|
|Gin, vodka, tequila, liquor, creams, prepared beverages||34.55|
Net assets tax
The net assets tax is an annual 1% tax on the net asset value of the company. It applies to the gross value of assets less reserve for accounts payable and any accumulated depreciation allowed under the income tax law and other deductions allowed by law. The law also allows a special deduction of HNL 3 million.
The net assets tax is in lieu of CIT when CIT is less than the amount due for net asset tax. Resident companies during their preoperative period (i.e. the period in which the company started operations but has not issued its first invoice) and companies operating in free trade zones (FTZs), among others, are exempt from the net assets tax.
Non-resident companies are not liable for the net assets tax.
Transfer taxes are levied on real estate transactions at HNL 1.5 per every HNL 1,000.
The Stamp taxes in Honduras are regulated by the Stamps and Sealed Paper Law.
Capital gains tax
In general, a 10% tax is applied on capital gains, regardless of the person’s residence status. Under the Zolitur law territory, a special regime, the tax rate is a 4% flat tax on capital gains.
The payment of capital gains tax must be made within ten business days after the agreed amount of the transaction has been determined.
In instances where a transaction is subject to the capital gains tax and a non-resident is involved, the buyer has an obligation to withhold 4% of the transaction amount as an advance payment to this tax and must pay it to the government within ten business days of the date of the transaction.
The government offices make a corresponding 10% withholding tax (WHT) on capital gains on payments made due to purchase and sale transactions of goods, indemnifications, purchase of rights, and securities.
Payroll taxes and contributions
Payroll taxes and contributions are paid by employers at the following rates:
- Social security tax contributions are assessed as follows:
- Sickness and maternity: 2.5% for employees on income, up to a maximum monthly ceiling of HNL 9,380.77 on income.
- Invalidity, old age, and death: 2.5% for employees on income, up to a maximum monthly ceiling of HNL 9,792.74 on income.
- Professional risk: 0.2% for employees on income, up to a maximum monthly ceiling of HNL 9,380.67 on income.
- Institute of Professional Education (Instituto Nacional de Formación Profesional or INFOP): 1% over the accrued amount.
- Housing fund ('Régimen de Aportaciones Privadas' or RAP/'Fondo Social para la Vivienda' or FOSOVI): 1.5% on the excess of the employee’s income of HNL 9,792.74. Note that this contribution is optional.
Special temporary contributions
For the term of five years starting 1 January 2014:
- Under the Special Temporary Security Contribution on Financial Transactions (Contribución Especial por Transacciones Financieras Proseguridad Poblicional), financial transactions are subject to a contribution of HNL 2.00 per thousand or fraction of a thousand, with some exceptions.
- Companies providing mobile communication services will pay a special temporary contribution of 1% on gross monthly income.
- Under the special temporary contribution for the protection of the environment from the mining sector, there is a 2% contribution on the freight on board (FOB) value of the exports.
- The special temporary contribution from the food and beverages business under special tax regimes is 0.5% on gross monthly income.
- The cooperatives special contribution is 3.6% on annual net surplus.
Companies doing business in Honduras are also subject to the rules and regulations of the respective municipalities. Taxes and obligations are ruled by the 'Plan de Arbitrios'. Some of these tax obligations include the following:
- Industry, commerce, and service tax, which is based on gross income per year (see the Taxes on corporate income section).
- Public services fee, which is paid for services such as waste management.
- Real estate tax, which is a tax on urban and rural real estate.
- Sign tax, which is a tax on public advertising.