Recent tax-related developments include an annual guide on tax havens and tax incentives for skyscraper development.
- El Salvador's tax authority on October 29, 2024, issued its annual guide on tax havens, aiming to impose a 25% income tax withholding rate on payments to entities in these jurisdictions, effective for the tax year 2025. The updated list includes 61 low-tax and 40 no-tax jurisdictions, with several additions and removals compared to the previous year. It also outlines criteria for considering unlisted jurisdictions as tax havens.
- The government of El Salvador has implemented tax incentives for skyscraper development, targeting projects with a height of 35 or more stories built after the enactment of these incentives. The key benefit includes a 15-year exemption from income and capital gains taxes for construction and development, applicable to both companies and individuals involved in such projects, including the first sale and rental activities. These incentives were established by Legislative Decree 95, effective from October 1, 2024.