Corporate Tax 2010 - BMR Advisors

Chapter 23
Honduras
Dennis Matamoros Batson
Arias & Muñoz
Evangelina Lardizabal
1 General: Treaties
1.1 How many income tax treaties are currently in force in
Honduras
There are no income tax treaties currently in force in Honduras.
1.2 Do they generally follow the OECD or another model
Not applicable, please see question 1.1.
1.3 Do treaties have to be incorporated into domestic law
before they take effect
Yes. Treaties must be incorporated into domestic law before they
can take effect in the country. In order to become domestic law and
enforceable, treaties must first be approved by the Legislative
before being ratified. If a treaty affects constitutional dispositions,
the process for approval and ratification must follow the same
process as for constitutional amendments. The Executive branch
may sign and ratify international agreements in matters of its
competence without prior approval by Congress, but must inform
Congress immediately of this.
1.4 Do they generally incorporate anti-treaty shopping rules (or
“limitation of benefits” articles)
This is not applicable because there are no income tax treaties
currently in force for Honduras.
1.5 Are treaties overridden by any rules of domestic law
(whether existing when the treaty takes effect or
introduced subsequently)
No. According to Honduran constitutional law, in the case of
conflict between a treaty that has been approved and ratified and
local law, the treaty will prevail. If domestic law is contradictory to
such treaty, said contradictions are annulled or reformed to
accommodate the treaty.
2 Transaction Taxes
2.1 Are there any documentary taxes in Honduras
Yes. Anyone who has a document that should need to be registered
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at the Institute of Property (real estate transfers, mortgages, liens,
pledges, powers of attorney, corporate documents, etc.) must pay
documentary taxes upon their presentation at said Institute to be
registered. The taxes to be paid are calculated according to the
value or type of transaction at a rate of 1.5 Lempiras per each 1,000
Lempiras of the value of the transaction filed for registration or a
flat fee for documents of no monetary value. In the event such
document to be registered implies transfer of title of real estate, then
the applicable registration fee will be equal to 1.5% of the value of
the contract.
The Honduran Bar Association requires stamp tax to be affixed on
any legal document issued by a Notary in Honduras. All documents
filed for registration at the Institute of Property must be authorised
by a Notary Public, hence requiring this stamp tax to be affixed
according to the following simplified rate: 10 Lempiras per every
100,000 Lempira transaction, or, in the case of transactions of no
monetary value, a L.5.00 stamp.
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
Yes. Honduras has a tax which is called “sales tax” but operates as
a value added tax. All taxpayers, except the final consumer, are
reimbursed from payment at the next stage.
The general tax rate of the sales tax is 12% over the value of the
taxable base of the imported goods or the sale of goods or services
subject to this tax. When this tax is applied to the importation or
sale of beer, liquor or other alcoholic beverages, cigarettes or other
products produced with tobacco, the tax rate is 15%. In the case of
beer, sodas and refreshments, this tax is applied over the sales price
at the distribution level, including the value of the production or
consumption tax at the importation or production level.
Sales taxes on national or international air travel tickets including
those issued via the internet are collected in the place where the
ticket or the e-ticket is issued. Travel agents are considered fiscal
agents for this effect and they must pay these taxes to the Dirección
Ejecutiva de Ingresos (tax authority) within 15 days of the next
calendar month of the sale.
2.3 Is VAT (or any similar tax) charged on all transactions or
are there any relevant exclusions
There are several exclusions in the payment of the VAT in Honduras.
In general, the most basic food products are exempt from the payment
of VAT (i.e. water, bread(s), rice, flour, corn, pasta, tortillas, meats,
chicken, fish, milk, milk products, vegetables and fruits, sugar, beans,
honey, salt, coffee); medicines for human use and surgical materials;
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