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Dividend tax in El Salvador 2026
Dividends settle at a flat 5% withheld by the paying company — one of the region's lowest rates — and nothing more is filed.
Distributions out of profits earned in or before 2011 carry no withholding at all, and foreign dividends are outside the territorial net.
At a glance
- top rate
- 5% final (25% only for tax-haven recipients)
- entry band
- 0% on pre-2012 profit distributions and foreign dividends
- tax year basis
- Withheld on distribution
- filing deadline
- None — the withholding is final
- residency basis
- Same 5% for residents and non-residents
- regime flag
- No deductions apply to dividend income
Rates
How investment income is taxed (2026)
| Rate | Base | Applies to |
|---|---|---|
| 5% | Gross dividend | Distributions by Salvadorean companies — final, residents and non-residents |
| 0% | — | Distributions from profits earned during or before 2011; foreign dividends of residents |
| 10% | Gross interest | Bank deposits and supervised-entity receipts — final; accounts averaging under USD 25,000 a month are exempt |
| 10% | Gross | Returns on securities and financial instruments — final |
| 25% | Gross dividend | Payments to residents of listed tax havens |
Thresholds & allowances
- Small-saver exemptionAverage balance under USD 25,000
Deposit interest for individuals is tax-free below this monthly average
Residency
Residency trigger
The payer withholds and the matter closes; dividend income takes no deductions and never joins the progressive scale.
Non-resident treatment
Foreign shareholders bear the same 5%, rising to 25% only for tax-haven residents; securities traded on the local exchange carry just 3% for non-residents.
Notes
- The 5% regime dates from 2012 — hence the grandfathering of older profits.
- Royalties, service fees and rents paid to residents suffer a 10% advance withholding that credits against the annual bill.
- Lottery and game prizes are taxed separately: 15% final for residents, 25% for non-residents.
FAQ
What is El Salvador's dividend tax?
A flat 5% final withholding on distributions from Salvadorean companies — for residents and foreign investors alike.
Is bank interest taxed in El Salvador?
At 10% final withholding — but accounts whose monthly average balance stays under USD 25,000 are exempt, and foreign deposits are outside the net.
Figures: tax year 2026, compiled from public sources. Not tax advice.