The short answer. No income tax applies to income from abroad or to capital you bring in from abroad. Since the reform to Article 3 of the Income Tax Law, in force from 22 March 2024, those values are not subject to income tax in El Salvador, whether you are domiciled in the country or not.
What the money earns once it is here is a different matter: rent, profits, local interest and capital gains made in El Salvador are taxed. And you should be able to document where the money came from.
What the 2024 reform says
Decreto Legislativo 969, approved on 12 March 2024 and in force since 22 March 2024, added a numeral to Article 3 of the Income Tax Law. It excludes from income every value received from abroad for any reason, including any movement of capital, from any foreign source. It applies to individuals, companies and entities without legal personality, domiciled or not.
The same decree repealed the rules that used to tax foreign securities income, interest on deposits abroad and loans to borrowers abroad. The Legislative Assembly described it as covering remittances, repatriated capital, foreign deposits, loans and securities.
What changed in 2026 for the stock market
Decreto Legislativo 544, in force since 21 April 2026, rewrote Article 158 of the Tax Code: the securities income and trades of non-domiciled investors on the Salvadoran exchange, primary or secondary, are no longer subject to withholding or income tax. The rate had been 3%.
What is still taxed once the money is here
The exemption covers what comes from abroad. Income produced in El Salvador follows the normal rules:
| What | How it is taxed |
|---|---|
| Income from abroad, and capital brought in from abroad | Not subject to income tax (Income Tax Law, Art. 3, numeral 4, in force since 22 March 2024) |
| Stock-market returns of non-domiciled investors on the Salvadoran exchange | No withholding and no income tax since 21 April 2026 (Tax Code, Art. 158) |
| Company profits made in El Salvador | 30%; 25% when taxable income is US$150,000 or less (Art. 41) |
| Income of individuals domiciled in El Salvador | Progressive: exempt up to US$6,600 a year, top rate 30% (Art. 37, table reformed in 2025) |
| Salvadoran income of non-domiciled individuals | 30% (Art. 37) |
| Payments from El Salvador to non-domiciled persons | 20% withholding as the general rule; 25% if the recipient is in a tax haven (Tax Code, Arts. 158 and 158-A) |
| Dividends and profit distributions | 5% final withholding (Art. 72) |
| Capital gains | 10%; if the asset is sold within twelve months of buying it, the gain is taxed as ordinary income (Art. 42) |
| Rent from a property in El Salvador | Taxable income (Arts. 2 and 16) |
| Buying property | Transfer tax of 3% on the value above US$28,571.43, paid by the buyer |
| Owning property | No annual national property tax; municipal fees apply |
| VAT | 13%; residential leases are exempt and exports are taxed at 0% |
| Bitcoin and digital assets | Gains exempt: Bitcoin Law, Art. 5 (as reformed in 2025), and the Digital Assets Issuance Law, Art. 36, for assets under that law |
Where the exemption ends
- Where the income is produced. Income from assets located in El Salvador, activities carried out there or capital invested there is Salvadoran-source even if it is paid abroad (Income Tax Law, Art. 16).
- Where the money came from. Increases in wealth or spending without a documented origin are treated as income (Tax Code, Art. 195). Keep the paper trail of every transfer.
- What the authorities see. The Financial Investigation Unit reports to the tax authority every month the identification data of people and transactions that originate abroad (Income Tax Law, Art. 27).
- Remote work. Whether a salary from a foreign employer, for work done while physically in El Salvador, counts as foreign income is not settled: the source rule points the other way and there is no official guidance. Ask a tax adviser.
- Gifts. Gifts are excluded from income only between spouses and close family; other gifts can be taxable for the person who receives them.
What this means in practice
Bringing savings, the proceeds of a sale abroad or an inheritance into El Salvador does not trigger income tax. Investing that money in a company, a rental property or a local deposit does: plan the structure for what the money will earn, not for the transfer. How to move the money.
Frequently asked
Do I pay tax on money I transfer to El Salvador?
No. Since 22 March 2024, income from abroad and capital brought in from abroad are not subject to income tax in El Salvador, for domiciled and non-domiciled persons.
Are remittances taxed in El Salvador?
No income tax applies to them: the 2024 reform covers every value received from abroad, and the Legislative Assembly named remittances among them.
Do I pay tax on rent from a property in El Salvador?
Yes. Rent from a property located in El Salvador is Salvadoran-source income and is taxed.
Is bitcoin taxed when I sell it?
Gains on bitcoin exchanges are not subject to capital gains tax under Article 5 of the Bitcoin Law, as reformed in January 2025.
Sources
- Income Tax Law reform, Decreto 969 (2024): www.asamblea.gob.sv
- Legislative Assembly on the 2024 reform: www.asamblea.gob.sv
- EY tax alert on the 2024 reform: www.ey.com
- Consolidated Income Tax Law (to May 2026): www.reddecontadores.com
- Tax Code reform, Decreto 544 (2026): www.asamblea.gob.sv
- García & Bodán on Decreto 544: garciabodan.com
- PwC tax summaries, El Salvador: taxsummaries.pwc.com
- Real Estate Transfer Tax Law: elsalvador.eregulations.org
- Bitcoin Law reform, Decreto 199 (2025): www.asamblea.gob.sv
- Digital Assets Issuance Law (2023): cnad.gob.sv
- US State Department, 2025 Investment Climate Statement: www.state.gov
General information, not tax advice. Rates and exemptions change; each case is reviewed with a tax adviser. Reviewed 25 September 2026.