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El Salvador tax guide 2026
El Salvador runs a dollar-based territorial system: foreign income is simply outside the net, local income climbs a short 0-30% scale with the first USD 6,600 free, and capital gains pay a flat 10% — with property held over 6 years and exchange-traded securities exempt entirely. Bitcoin gains stay tax-free even after the 2025 reform made acceptance voluntary, and there is no inheritance tax.
- Rate range
- 0% – 30% (Salvadorean income only)
- Key allowance
- First USD 6,600 a year tax-free (USD 550 a month)
- Tax year
- Calendar year
- Filing deadline
- April (4 months after year-end); salary-only earners under USD 9,100 generally file nothing
Taxes covered
- Income tax30%
Four bands reaching 30% above USD 22,857, each pairing a statutory fixed quota with a rate on the excess — Salvadorean-source income only, with the bill capped at 30% of taxable income.
- Dividend tax5%
Dividends from Salvadorean companies carry a 5% final withholding — the same for residents and foreign investors; pre-2012 profits are grandfathered.
- Capital gains tax10%
Non-habitual gains after a 12-month hold pay a flat 10%; property held over 6 years and exchange-traded securities are exempt.
- Crypto tax0%
Bitcoin exchanges are exempt from capital gains tax, digital assets within the regulated LEAD ecosystem carry their own exemption, and genuinely foreign-source gains fall outside the territorial net — source is fact-based, not set by the platform's domicile.
- Social security10.25%
Employees pay 3% health insurance (capped at USD 30 a month) plus 7.25% pension on full pay — about 10.25% at modest salaries, less at high ones.
- Inheritance tax0%
No inheritance tax exists, and inheritances and bequests are exempt income; only gifts outside the close family are taxed — as income of the recipient.
- Withholding tax20% / 25%
Non-residents face a 20% final withholding on gross Salvadorean income — 25% for tax-haven residents — with dividends at 5% and several 3-10% carve-outs.
Special regimes
- Foreign income: 0%
Foreign salaries, deposits, securities, rents, gains and pensions of residents are excluded from income tax entirely.
- Bitcoin gains tax-free
Bitcoin exchanges remain exempt from capital gains tax after the 2025 reform, and digital assets within the regulated digital-assets ecosystem — Ley de Emisión de Activos Digitales (LEAD) — carry their own exemption.
- Patient property sellers exempt
Occasional sales of real estate held more than 6 years pay nothing; other non-habitual gains pay a flat 10% after a 12-month hold.
- New-investment talent rate
Technical and managerial staff of qualifying new investments pay 10% on their first USD 100,000 a year — and the excess is exempt.
- No inheritance tax
Inheritances and bequests are exempt income, as are gifts to spouses, children, grandchildren, parents and grandparents.
Recent changes
- 2025-05The exempt slice rose to USD 6,600 a year (USD 550 a month) and new monthly withholding tables took effect.
- 2025-01The Bitcoin Law was rewritten under the International Monetary Fund deal: acceptance became voluntary, legal-tender wording was deleted, taxes are payable only in US dollars — but the capital-gains exemption on bitcoin stayed.
- 2025-01Two new decrees arrived: a 10% capped rate for technical staff of new investments (first USD 100,000, excess exempt) and a 30% tax on foreign-funded gifts to registered foreign agents.