Companies operating under a special tax regime are exempted from CIT, sales tax, customs duties, and some municipal taxes. These special tax regimes are the following:
- Free trade zones (FTZs).
- Industrial processing zone (Zona Industrial de Procesamiento or ZIP).
- Temporary import regime (Régimen de Importación Temporal or RIT).
- Tourism incentive law.
- Law promoting the generation of electric energy with renewable resources (Ley de Promoción a la Generación de Energía Eléctrica con Recursos Renovables), which provides tax exemptions for ten years for projects generating 50MW and over.
- In the regulations for the FTZs there is a consideration for international service companies (e.g. business processing operations [BPOs], call centres and contact centres, shared service centres) that will have the same tax exoneration provided by this regime.
- The Call Centre and BPO Promotion Law, which provides a tax holiday on import of tools, parts, accessories, furniture and office equipment, and all goods involved with the company’s active business as well as an income tax holiday on revenue from all the business activities carried out within the FTZs.
Companies must comply with some governmental requirements to operate under one of the above-mentioned special regimes.
Companies under special tax regimes are allowed to sell their partial or total production in the local market; income from local sales will be subject to the regular corporate tax regulations.
There is a reform to the tariff and customs legislation that grants tax exonerations in general; the government established in the Decree No. 278-2013 a list of the valid tariff and customs tax exonerations decrees that continue to have the corresponding benefits (contact your local PwC practice for more information).
There is also a reform to the income tax legislation that grants tax exonerations in general; the government established in the Decree No. 278-2013 a list of the valid income tax exonerations decrees that continue to have the corresponding benefits (contact your local PwC practice for more information).
Effective 1 January 2014, the term of tax exoneration is limited to 12 years to those companies under special tax regimes with no specific term for their tax benefits specified in their corresponding resolution issued by the government.
Effective 5 June 2014, the Law for the Promotion and Protection of Investment (Ley para la Promoción y Protección de las Inversiones) was amended, establishing a 15-year term for tax stability agreements, except for Public and Private Alliances projects. At the same time, it repeals the special income tax discounts granted by this law.
Special benefits exist for industries that import semi-manufactured materials for assembly in Honduras and export finished products. Benefits consist of duty-free imports of raw materials for subsequent export as manufactured products. Machinery for these industries may also be imported duty-free.
Foreign tax credit
There are no provisions for foreign tax credits in Honduras.