Honduras

{"ftc_utility":"medium","fbar_trigger_notes":"Expats with Honduran bank accounts exceeding USD 10,000 in aggregate at any point in the calendar year must file FinCEN 114 (FBAR). Honduras uses the lempira (HNL); account balances must be converted to USD at the Treasury year-end rate. Local banks routinely require an RTN (tax registration number) to open accounts, which also creates a Honduran tax filing obligation.","ftc_utility_reason":"Honduras taxes residents on worldwide income at progressive rates up to 25%. US citizens with income taxed locally in Honduras can use the Foreign Tax Credit to offset US tax liability dollar-for-dollar on those amounts. Because the top Honduran rate (25%) is below the top US federal rate (37%), the FTC provides meaningful but incomplete shelter for high earners. For income below the FEIE exclusion amount the FTC is less relevant.","presence_day_count_notes":"Honduras does not impose a maximum stay limit that would prevent accumulation of the 330 qualifying days. Tourist entry is typically granted for 90 days within the CA-4 zone (Honduras, Guatemala, El Salvador, Nicaragua); beyond that a residency permit is advisable. Days spent in other CA-4 countries count toward the 330-day test only if outside the United States. Expats establishing legal residency obtain pensionado, rentista, or investor residency through ZOLI or standard channels.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":7200,"local_tax_rate_on_earned_income":0.25,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by Honduras tax residents is taxable under the worldwide income principle. Rates follow the progressive schedule up to 25%. No treaty exemption is available. Tax rate varies with total income level.","tax_rate":null,"locally_taxed":true},"social_security":{"notes":"No US-Honduras tax or totalization treaty exists. US Social Security benefits received by Honduras residents are not expressly exempt under local law. Honduras taxes worldwide income of residents, so Social Security income is in scope, though enforcement for foreign-source income at lower income levels is limited in practice.","locally_taxed":true,"treaty_protection":false},"roth_distributions":{"notes":"Roth IRA qualified distributions are return of after-tax contributions and are generally not treated as taxable income. However, with no US-Honduras treaty, there is no formal exemption framework. In practice Honduras tax authorities have no mechanism to distinguish Roth from traditional distributions, so treatment is uncertain. Conservative approach is to treat as potentially taxable.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"Honduras and the United States do not have a bilateral income tax treaty. US-sourced pension and retirement distributions received by a Honduras tax resident are subject to Honduran income tax. Distributions may be characterized as foreign-source pension income and potentially subject to withholding or progressive rates depending on classification. The 10% rate cited reflects the general foreign-source income withholding that may apply; in practice residents declare and pay at progressive rates up to 25%.","tax_rate":0.1,"locally_taxed":true,"treaty_protection":false}}

{"rate":0.1,"notes":"Honduras taxes capital gains at a flat 10% rate. Gains from the sale of real property may be subject to a separate transfer tax as well.","details":{"tax_type":"Capital Gains Tax","country_name":"Honduras","country_iso_code":"HND","source_references":["PwC Worldwide Tax Summaries - Honduras","Honduras Tax Code (Codigo Tributario)"],"last_verified_date":"2026-06-03","general_description":"Capital gains in Honduras are generally taxed at a flat 10% rate for individuals. Gains on disposal of assets are treated separately from ordinary income rather than folded into progressive brackets. Real estate transfers also attract a separate transfer tax at the municipal level.","corporate_capital_gains":{"rate":0.25,"tax_treatment":"Corporate capital gains are included in ordinary taxable income and taxed at the standard corporate income tax rate of 25%."},"individual_capital_gains":{"rate":0.1,"tax_treatment":"Flat 10% withholding on capital gains for resident individuals. Non-residents are also subject to withholding at 10% on gains sourced in Honduras."}}}

{"notes":"Dividends paid by Honduran companies are subject to a 10% withholding tax. This applies to both residents and non-residents. Dividends distributed from profits already taxed at the corporate level are not further grossed up, so the effective combined burden is the 25% corporate rate plus 10% on the after-tax remainder.","rates":[{"rate":0.1,"type":"withholding","notes":"Standard withholding rate on dividends paid to resident and non-resident individuals. No reduced treaty rate with the US - Honduras and the US do not have a comprehensive income tax treaty."}]}