Country：尼加拉瓜 · Tax, Finance & Audit
Nicaragua · Tax, Finance & Audit
Nicaragua applies a territorial taxation system (only Nicaragua-source income taxed), administered by the Directorate General of Revenue (DGI). CIT standard rate 30% (the higher of '30% of net profit' and the '1%-3% of gross revenue' minimum tax); VAT (IVA) standard 15% with exports at 0%; withholding: dividends 15%, interest 15%, royalties 15%, services 20%. Social security (INSS) employer about 21.5%-22.5% and employee 7%, plus the 2% INATEC training tax. Zona Franca enterprises enjoy 100% income-tax exemption for the first 10 years, then 60%, with the 2026 amendment allowing unlimited extension with Commission approval. The China-Nicaragua FTA mainly reduces tariffs and does not directly change income tax.
Key points
- Territorial taxation: only Nicaragua-source income taxed; offshore income not taxed.
- CIT: 30% (on net profit) vs the 1%-3% gross-revenue minimum tax, whichever is higher.
- VAT (IVA): standard 15%, exports 0%; basic foods and pharmaceuticals exempt or zero-rated.
- Withholding: dividends 15%, interest 15%, royalties 15%, services 20%.
- Capital-gains tax about 15% (per PwC overview; some sources list 10% for non-recurring gains; follow the latest DGI rules).
- Social security (INSS): employer about 21.5%-22.5%, employee 7%; INATEC training tax 2% (on payroll).
- Zona Franca: 100% income-tax exemption for the first 10 years, then 60%; 2026 amendment allows unlimited extension.
- Fiscal year 1 January - 31 December; CIT filed within 2 months after fiscal year-end; monthly prepayments.
Procedure
- Obtain the tax number RUC (via DUR, see incorporation dimension).
- Register as a taxpayer and confirm tax types (CIT/IVA/withholding).
- Make monthly income-tax prepayments (1%-3% of gross revenue) and file IVA monthly.
- Prepare annual financial statements and complete the CIT settlement (within 2 months after fiscal year-end).
- If a FEZ enterprise, apply for and maintain income-tax exemption status.
- Retain transfer-pricing and cross-border payment vouchers for audits.
Hard requirements
- RUC tax number
- Local accounting books and financial statements (Spanish)
- Employee INSS and withholding compliance
- Cross-border payment withholding and declarations
Costs
Taxation is rate-driven; compliance costs concentrate in accounting, audit and legal⏱ ⏱ Timeline：Monthly filings continuous; annual CIT filed within 2 months after fiscal year-end (about end-February/early-March of the following year).⚠ Common risks
- Underestimating the 1%-3% minimum tax: back-taxes and fines
- VAT invoice and zero-rated export voucher mismanagement: penalties
- Cross-border payments without withholding (dividends, interest, services): back-taxes
- FEZ qualification conditions (all exports, local employment) not maintained: incentives cancelled
- Capital-gains rate caliber divergence (10% vs 15%): follow the latest DGI publication
Handbook
📘 Step-by-Step Handbook (with owner / timeline / cost / penalties)
Applies to：Companies established and operating in Nicaragua (including Chinese subsidiaries and FEZ enterprises) involving CIT, VAT, withholding and social-security compliance. Excludes individual comprehensive income (listed as key points only).
Prerequisites
- Company registration completed with the RUC tax number (see incorporation dimension)
- Bank account opened with local accounting configured
- Whether FEZ incentives apply confirmed
- Cross-border payments (dividends, interest, royalties, services) and transfer pricing planned
| Step | Action | Owner | Timeline | Cost | Official form / system | Notes & penalties |
|---|---|---|---|---|---|---|
| 1 | Tax number and taxpayer registration Obtain the RUC via the unified tax registration (DUR); register as a taxpayer and confirm payable tax types (CIT, IVA, withholding) | Company/accountant | Parallel with registration | Low fees | RUC registration | RUC is the prerequisite for invoicing, imports and bank accounts Penalty：Operating or invoicing without RUC is a violation |
| 2 | Monthly income-tax prepayments Prepay income tax monthly at 1%-3% of gross revenue (by enterprise size: medium 2%, large over USD 5 million 3%); final settlement with CIT, whichever is higher | Company/accountant | Monthly | Taxes | Monthly prepayment filings | A definitive minimum tax Penalty：Missed or under-prepaid: back-taxes and penalties |
| 3 | IVA VAT filing File IVA at 15% on domestic sales, services and imports; exports at 0%; basic foods and pharmaceuticals exempt or zero-rated | Company/accountant | Monthly | Taxes | IVA filings | Issue compliant electronic or paper invoices and retain them Penalty：Non-compliant invoices or missed filings penalized |
| 4 | Annual CIT settlement Within 2 months after fiscal year-end (1/1-12/31), prepare financial statements and file CIT; settle at the higher of 30% of net profit and the minimum tax; refund or top up | Company/auditor | Within 2 months after fiscal year-end | Audit/accounting fees | Annual CIT filing | FEZ enterprises can apply for exemption Penalty：Late filing fines |
| 5 | Withholding and cross-border payments Withhold 15% on dividends, interest and royalties to non-residents and 20% on services; retain beneficial-owner and contract vouchers for cross-border payments | Company/finance | At payment | Withholding taxes | Withholding declarations | Treaty or tax-law violations can be pursued Penalty：Missed withholding: back-taxes and penalties |
| 6 | (FEZ) Income-tax exemption application and maintenance Zona Franca user enterprises enjoy 100% income-tax exemption for the first 10 years and 60% thereafter under Law 917; the 2026 amendment allows multiple/unlimited extension with Commission approval; maintain all exports and reasonable local employment | Company/PRONicaragua | Continuous | Application/legal fees | FEZ tax-incentive status | The amendment was published in La Gaceta No.61 of 2026-04-09 Penalty：Conditions not maintained: incentives cancelled |
| 7 | INSS social security and INATEC Pay INSS monthly for employees (employer about 21.5%-22.5%, employee 7%) and the INATEC training tax (2% of payroll) | Company/HR | Monthly | Social contributions | INSS filings | Foreign employees equally applicable Penalty：Unpaid social contributions fined; employment compliance affected |
✅ Self-check list
⚠ Common pitfalls
Underestimating the minimum tax影响：Final settlement below the 1%-3% minimum: difference back-taxed with possible fines规避：Prepay monthly in full; track revenue-size tiers
IVA voucher mismanagement影响：Export zero-rating questioned; back-taxes demanded规避：Issue compliant invoices; retain export shipping and origin vouchers
Cross-border payments missing withholding影响：Withholding back-taxed with late fees规避：Build non-resident payment withholding flows (dividends/interest/royalties 15%, services 20%)
FEZ conditions not maintained影响：Income-tax and import-duty exemptions lost规避：Maintain all-export business and reasonable local employment; file on time
Capital-gains rate caliber misused影响：Wrong rate applied; filings adjusted规避：Follow the latest DGI publication (overview about 15%)
Ignoring social compliance影响：Employment violations fined; visa processing affected规避：Pay INSS/INATEC monthly in full (see employment dimension)
📅 Ongoing post-incorporation obligations
- Monthly IVA and income-tax prepayments
- Annual CIT settlement and financial statement audits
- INSS/INATEC monthly payments
- FEZ incentive annual maintenance filings
- Transfer-pricing and cross-border payment documentation retained
🔗 Official portals
📎 Source：https://www.dgi.gob.ni ; https://www.bcn.gob.ni ; https://taxsummaries.pwc.com/Nicaragua ; https://taxatlas.io/country/nicaragua ; https://www.mofcom.gov.cn/dl/gbdqzn/upload/nijialagua.pdf
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