Nicaragua - Taxation

In 2002, the individual income tax ranged from 10% to 25%, and the corporate income tax rate was 25%, down from 30% in 1999. The main indirect tax is Nicaragua's value-added tax (VAT), introduced in January 1975 with a standard rate of 6%. In 2003, the standard rate had risen to 15%, and there were two reduced rates, 5% and 6%, applied to international flights, land leases, and hotel accommodations, among other things. Basic necessities were zero-rated; water, power, exports and imports. Exempted from VAT were finance, petroleum products, publications and medicines. Other taxes included a luxury tax generally lower than 15%; a 1% municipal tax levied on sales; a 1% tax on net worth; and a real estate tax at 1% of assessed value.

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