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El Salvador: Guidance on preferential tax regimes and Form F-935 for reporting withholding taxes

Tax authority has issued guidance on preferential tax regimes and introduced Form F-935 for reporting withholding taxes on foreign-sourced funds.

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december 15, 2025

The tax administration (DGII) has issued guidance identifying jurisdictions with preferential tax regimes and outlining applicable tax treatments for transactions with entities in such jurisdictions. The guidance includes lists of recognized countries, treaty relationships, and rules on transfer pricing, withholding, and deductions. Taxpayers may seek clarification for jurisdictions not explicitly mentioned.

Additionally, the DGII issued a notice regarding the launch of Form F-935, which foreign agents—residents or entities in El Salvador—must use to report withholding taxes on funds received from abroad. Available on the DGII portal since October 1, 2025, Form F-935 requires foreign agents to declare all applicable withholding taxes by the 15th day of the month following the withholdings.
 

For more information, contact a KPMG tax professional in El Salvador:

Flor Jaime | fjaime@kpmg.com

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