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Thinking beyond borders


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Honduras thinking beyond borders
The Honduran Income Tax Law states "any kind of yield, gain, profit, rent, interest, proceeds, profit, participation, salary, wage, fee and generally any perception in cash, securities, credit or kind that modifies the equity of the taxpayer is considered income."

Key message

As of 2017 the income tax levies the territorial income of the resident taxpayer, nonresidents are subject to income tax from Honduran source.

Income tax

Liability for income tax

Individuals that had remained for more than 3 months in the country/jurisdiction are considered residents therefore are obliged to pay income tax. Individuals receiving income from a single source are not obliged to file a tax return to the tax authorities when their tax is withheld by the employer.

Tax trigger points

Every individual resident or not resident in the country/jurisdiction, receiving any form of income from Honduran source.

Types of taxable income

Any kind of yield, gain, profit, rent, interest, proceeds, profit, participation, salary, wage, fee and generally any perception in cash, securities, credit or kind that modifies the equity of the taxpayer is considered income.

Tax rates

The calculation of the income tax for individuals shall be done according to the following tax rate table (in Honduran lempira (HNL)):

From To Tax Rate











No limit


Non-taxable income for individuals:

  • Thirteenth and fourteenth salaries which are two additional payments of salaries that individuals receive in June and December as per the Labor Code, are exempted up to 10 minimum wages.  The minimum wage for 2019 was HNL9,443.24 (9,443.24 x 10=94,423.40) and for 2020 the minimum wage is HNL10,022.04 (10,022.04 x 10=100,220.40), thus individuals receiving compensations for this concept up to HNL 100, 220.40 are not subject to income tax.
  • Vacation bonus is exempted up to 30 days of salary.

Deductible expenses for individuals:

  • Medical and Educative expenses HNL40,000.00.
  • Welfare Insurance Regime, Collective Capitalization Pillar Colectivo (Regimen del Seguro de Prevision social, Pilar de Capitalization Colectivo HNL9,792.74 x 2.5% x 12=HNL2,937.82
  • Welfare Insurance Regime, Complementary Individual Account Regime (Regimen del Seguro de Prevision Social, Pilar Complementario de Cuentas Individuales RSPSPCCI), Salary excess of HNL9,792.74 x 1.5%.
  • Total of the contributions to a Private Pension fund.


It is considered as residents in Honduras when the individuals have remained in Honduran territory for more than 3 months in the calendar year that corresponds to the tax, besides of the cases that the residence is determined by any other legal disposition.

Nonresidents with agent or accredited representative in Honduras shall be considered as resident for purposes of application of the income tax, for the revenues obtained from the operation performed within the Republic’s territory.

Nonresidents shall be subject to income tax upon revenue obtained from source within the country/jurisdiction, whether derived of existent goods in Honduras, of services rendered in national territory or abroad, or of business performed by a resident in the Republic, although the corresponding revenue to such income would be paid or credited to the individual by residents or nonresidents.

Individuals who temporarily remain in the Republic and perform acts of any kind or provide services that produce taxable income shall submit a tax return before leaving the country/jurisdiction and request the payment of it. The “Dirección Ejecutiva de Ingresos” (DEI Tax Authority) shall immediately proceed to determine the tax liability according to the following:

Gross income obtained from Honduran source by nonresident individuals or legal entities, shall pay pursuant to the tax rate detailed as follows:

No. Concept Tax rate


Lease of real property and movable goods, except those mentioned in numerals 5 and 7 of this article.



Royalties from mining and any other natural resources operations.



Wages, salaries, commissions or any other compensations for services supplied whether within the national territory or out of it, excluding remittances.



Income or profit obtained by foreign entities through branches, subsidiaries, filial, agencies, legal representatives and any other that operates in the country/jurisdiction.



Income, profit, dividends or any other form of participation on profits or reserves of individuals or legal entities.



Royalties and other amounts paid for using patents, design, procedures and secret formulas, trademarks and author rights except those indicated in numeral 12.



Interest upon commercial operations, bonus, securities and any other kind of liabilities.



Income for the operation of aircrafts, ships, and ground vehicles.



Operation incomes of communication entities, use of software, software solutions, telematics and other of the telecommunication area.



Insurance and bond premiums of any kind of contracted policy.



Income derived from public entertainment events.



Movies and videotapes for theaters T.V, video club, cable TV rights.



Any other income not mentioned above.


Social security

Liability for social security

  2019 2020


Type of Contribution

Employee Rate

Employer Rate

Social Security



Welfare Insurance Regime, 

Collective Capitalization Pillar 

Colectivo (Regimen del Seguro 

de Prevision Social, Pilar de 

Capitalizacion Colectivo




Health Care Insurance Regime

(Regimen del Seguro de Atencion 

a la Salud RSAS)



Monthly Maximum Salary For






Monthly Maximum Salary For




There are no reciprocal agreements.

Compliance obligations

Employee compliance obligations

Every taxpayer is required to submit to the Tax Authorities by themselves or through an agent or legal representative, from 1 January to 30 April or next business day of each year, a tax return of the income obtained from one or more sources in the previous year. The individuals receiving income that does not exceed HNL158,995.07 are exempt of submitting this tax return.

The employer is obliged to withhold the income tax and submit the corresponding tax return when the employee receives income from a single source.

If the employee is a non-resident or not domiciled in the country/jurisdiction the income received from Honduran source will be subject to the rates. The person performing the payments is obliged to withhold, file and pay the amounts to the tax authorities no later than the 10 subsequent days of the following month.

Employer reporting and withholding requirements

The employer is obliged to perform a monthly withhold for the social security payment to the employee recorded in a payroll the amounts withheld must be filed and paid to the corresponding entity.

Other issues

Double taxation treaties

In Honduras there are no double taxation treaties in force.

Permanent establishment implications

Specific Permanent establishment regulations became in force since 1 January 2014.

Indirect taxes

VAT 15 percent.

Transfer pricing

Transfer pricing regulations became in force since 1 January 2014.

Work permit/visa requirements

In order to work in Honduras the non-residents must have a work permit.

Local data privacy requirement


Exchange control


Non-deductible costs for assignees





All information contained in this publication is summarized by KPMG Impuesto y Asesoría, S.A, the Honduran member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on current Honduran Tax Legislation.

© 2021 KPMG Impuesto y Asesoría, S.A., a Honduran corporation and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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