Group taxation is permitted only when previously approved by the tax authorities. The economic group must submit a business case to the tax administration justifying the economic reason for their request.
The Nicaragua tax system recognises transfer pricing as a method of trading. Law 822 regulates transfer pricing rules based on the Organisation for Economic Co-operation and Development (OECD) regulations (including contemporaneous documentation requirements), and it has been in effect since 30 June 2017.
The Nicaragua tax system does not impose any form of thin capitalisation rules.
Controlled foreign companies (CFCs)
Nicaragua does not have any CFC rules.