Individual - Tax administration

Last reviewed - 23 January 2024

Taxable period

The tax year in Nicaragua is the calendar year. Nonetheless, by a duly supported request, the tax administration may authorise a different period, provided this does not exceed 12 months.

Tax returns

Individuals who obtain income only from employment (i.e. an employer) and do not benefit from the deduction for expenses on education, health, and professional services are not obligated to submit an annual income tax return. 

The annual individual income tax return (Form IR-106) is applicable for taxpayers who obtain income from two or more employers that, in the aggregate, exceed an annual income of NIO 100,000. The taxpayer should submit the annual income tax return within 90 days after year-end.

Payment of tax

The employer, through the payroll, is responsible to withhold and pay the income tax on a monthly basis through withholding income tax return Form IR-122.

For those individuals filing the annual individual income tax return (Form IR-106), the final tax payment is due within 90 days after year-end.