Nicaragua

Taxable period

The standard tax year in Nicaragua is the calendar year (from 1 January to 31 December); however, companies can obtain authorisation from the tax authorities in order to change or have a different year-end: 31 March, 30 June, or 30 September.

Tax returns

Without exception, all corporations are required to file CIT returns for a fiscal year within the following two months after the fiscal year-end.

Payment of tax

Corporations shall pay fiscal-year income tax in monthly advance payments. The monthly payable amount is calculated between 1% and 3% of gross income.

Final CIT payment is due with the final CIT return (i.e. within the following two months after the fiscal year-end).

Tax audit process

The tax authorities are entitled to conduct a tax audit of the taxpayer when considered necessary. The taxpayer has the obligation to submit before the tax auditor the corporate information and documents related to the generation of income.

Statute of limitations

The statute of limitation in Nicaragua is up to the last four fiscal-ended periods. Nonetheless, an extraordinary extension to the last six fiscal-ended periods could be enforced in case of misreporting or tax fraud. 

Topics of focus for tax authorities

In Nicaragua, tax audits are determined randomly; however, high taxpayers or taxpayers who request reimbursement of tax credit are more likely to be audited. For corporate tax compliance, the tax authorities normally seek information in regards to taxpayer operations through the advance income tax returns.