El Salvador

{"ftc_utility":"low","fbar_trigger_notes":"US expats who open Salvadoran bank accounts (denominated in USD, as El Salvador uses the US dollar as legal tender) must track balances. If combined foreign account balances exceed $10,000 at any point during the year, FBAR filing (FinCEN 114) is required. El Salvador's dollarized economy means accounts are USD-denominated, simplifying conversion calculations.","ftc_utility_reason":"El Salvador's territorial tax system means foreign-source income (including most US-earned income for expats working remotely) is not subject to local tax. With little or no Salvadoran tax paid on foreign income, there are minimal foreign tax credits to claim against US tax liability. The FEIE is generally the more useful mechanism for US expats earning income from Salvadoran sources.","presence_day_count_notes":"El Salvador does not impose strict visa-based day limits that would routinely disqualify the 330-day physical presence test. The country offers tourist stays and residency options that are generally compatible with maintaining the required presence. Expats on short-term tourist entries should confirm their legal status does not create tax complications.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":7200,"local_tax_rate_on_earned_income":0,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign-source pension income, including US pension distributions, is generally not taxable in El Salvador under the territorial income tax system. Locally sourced Salvadoran pension income would be subject to the standard progressive rates.","tax_rate":null,"locally_taxed":false},"social_security":{"notes":"US Social Security benefits are US-source income and not subject to Salvadoran tax under the territorial system. No totalization agreement or tax treaty exists between the US and El Salvador, so no treaty protection applies. US expats receiving Social Security remain subject to US taxation on up to 85% of benefits depending on combined income.","locally_taxed":false,"treaty_protection":false},"roth_distributions":{"notes":"Roth IRA distributions are US-source and should fall outside El Salvador's territorial tax base. No local tax expected. US-side tax treatment (generally tax-free if qualified) remains governed by US law.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"El Salvador uses a territorial tax system - residents are generally taxed only on Salvadoran-source income. US-sourced retirement distributions such as 401(k) and IRA withdrawals are foreign-source income and should not be subject to Salvadoran income tax. There is no US-El Salvador income tax treaty, so no treaty protection applies. US expats still owe US tax on these distributions under US worldwide taxation rules.","tax_rate":null,"locally_taxed":false,"treaty_protection":false}}

{"rate":0.1,"notes":"Capital gains in El Salvador are generally taxed at a flat 10% rate for individuals. Gains from the sale of securities on the local stock exchange may qualify for reduced treatment.","details":{"tax_type":"Capital Gains Tax","country_name":"El Salvador","country_iso_code":"SLV","source_references":["PwC Worldwide Tax Summaries - El Salvador","El Salvador Income Tax Law (Ley de Impuesto sobre la Renta)"],"last_verified_date":"2026-06-03","general_description":"El Salvador applies a separate 10% flat tax on capital gains for individuals. This is distinct from the progressive income tax schedule. Gains on publicly listed securities traded on the Bolsa de Valores de El Salvador may be exempt or subject to reduced rates under specific conditions. Corporate capital gains are generally taxed as ordinary income at the 30% corporate rate.","corporate_capital_gains":{"rate":0.3,"tax_treatment":"Taxed as ordinary corporate income at the standard 30% corporate income tax rate. No separate capital gains regime for corporations."},"individual_capital_gains":{"rate":0.1,"tax_treatment":"Flat 10% rate on net capital gains. Gains from sale of a primary residence may be partially exempt if certain conditions are met. Stock exchange gains may qualify for exemption under specific rules."}}}

{"notes":"Dividends paid by Salvadoran companies to resident and non-resident individuals are subject to a 5% withholding tax. This withholding is generally a final tax for individuals. Dividends paid to corporate shareholders may also be subject to withholding depending on the recipient's status.","rates":[{"rate":0.05,"type":"withholding","notes":"5% withholding applies to dividends distributed by Salvadoran entities to both resident and non-resident individuals. Withholding is treated as a final tax for individual recipients."}]}