All you need to know about Iberian America

Personal Income Tax Rates in Each Latin American Country

Published August 20, 2020 in How to Make a Living Abroad - 0 Comments

If you plan on living in Latin America but not sure yet about which country you want to move to….

How about try considering the different personal income taxes that each country has?

In this article, we will look briefly at some of the personal income tax rates in each country and also consider which countries have worldwide income tax and which ones don’t.

But before we do that, I would also like to mention a few things regarding how to avoid taxes down here long term.

Because it may not be necessarily the case that you will pay taxes.

So let’s get into that first….

The Non-Residency Option

If you were to pay taxes in Latin America, it would most likely stem from personal income tax or property tax.

Now keep in mind that you can avoid these things….

But it will involve avoid getting residency in any specific country.

And you can live down here without residency for sure.

There are people for example who live down here illegally by overstaying in these countries – though I don’t recommend that obviously.

But the usual punishment for that is a small fine of at most a few hundred bucks but could be as low as like 25 bucks maybe depending on the country.

However, you can live here legally of course and not pay taxes.

By simply getting a tourist visa and leaving when the tourist visa is over and going to live in another country…

Now keep in mind that that in most countries, you will be considered a “tax resident” if you stay in that country for about 180 days in a year.

This is important to note as you will see reminders under the “worldwide income” subsection of each country below that says that non-residents are only taxed on their locally earned income or something like that.

But if you become a tax resident from staying for about 180 days in a country that taxes worldwide income, then you could, from what I understand, be legally obligated to pay taxes on that worldwide income.

Though if all if your income is online and from sources that don’t originate from that Latin country specifically, then it is unlikely that any tax enforcement organization in these countries will come after you.

The same could probably be said as well even if you have residency down here – all income online from sources outside the Latin country and the funds go to a bank account located outside the Latin country.

After all, how would that Latin country know about your funds?

I know of at least one guy who has residency in Guatemala who doesn’t pay any taxes.

And I know a few folks who live down here for more than those 180 days without residency and never pay taxes to any Latin government as all of their income comes from online.

But also keep in mind the risk is there if you were to go down that path – you never know if said government would go after you as Mexico has apparently been increasing its efforts from what I have heard from other expats.

Granted, I imagine it’s likely a small number of folks they are pinching out of all of the Americans who live here without paying their taxes but still – the risk is still there obviously.

And I’m not saying or encouraging you to avoid paying taxes illegally – but just saying that happens.

Also, when it comes to the tourism visas themselves…

Some countries are more strict than others.

In Mexico, it’s possible to get a 6 month visa, leave and come back to get a new visa for another 6 months.

Colombia? Can only stay there legally for 6 months per calendar year.

So if you like Mexico, you can be here year around.

For Colombia, you’d either have to overstay the visa legally (which, if you did this enough times, I’d imagine you would be blocked from entering eventually but I’m not sure)…

Or, more realistically speaking, you spend 6 months in Colombia and then 6 months somewhere else.

Say Colombia for 6 months and the Dominican Republic for 6 months.

I know about one guy who does that.

So if you don’t plan on getting residency or owning a property down here – then honestly the different tax rates listed below are not really important for you know.

Because you wouldn’t be paying them anyway.

So just keep that in mind.

Anyway, let’s get into those specific tax numbers that you are more likely to pay if you get residency down here country by country.

This is all just based on online research I have done – I obviously haven’t paid taxes to every single country in Latin America.

Finally, keep in mind that this only looks at the national personal income tax rates. I didn’t look into any taxes on income by a state or province level.

And if you pay taxes in any of these countries and find any of the information out of date, let me know.

This article was last updated on August 11, 2020.

Let’s begin!

Argentina

Worldwide Income tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0 ARS to 33,039.81, the tax rate is 5%.
  • From 33,039.81 ARS to 66,079.61 ARS, the tax rate is 9%.
  • From 66,079.61 ARS to 99,119.42 ARS, the tax rate is 12%.
  • From 99,119.42 ARS to 132,159.23 ARS, the tax rate is 15%.
  • From 132,159.23 ARS to 198,238.84 ARS, the tax rate is 19%.
  • From 198,238.84 ARS to 264,318.45 ARS, the tax rate is 23%.
  • From 264,318.45 ARS to 396,477.68 ARS, the tax rate is 27%.
  • From 396,477.68 ARS to 528,636.91 ARS, the tax rate is 31%.
  • For anything over 528,636.91 ARS, the tax rate is 35%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Bolivia

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

The personal income tax rate is a simple 13%.

Brazil

Worldwide Income Tax: Yes

****Keep in mind that all foreign income earned by non-residents is tax exempt. If you are a tax resident, then you are not exempt from personal income tax on your foreign income. If you are a non-resident earning income from a Brazilian source, the tax rate is a flat 25% with no deductions allowed and 15% on rental income from a Brazilian property. Source for that is here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0 BRL to 1,903.98 BRL, the tax rate is 0%.
  • From 1903.99 BRL to 2,862.65 BRL, the tax rate is 7.5%.
  • From 2,862.66 BRL to 3,751.05 BRL, the tax rate is 15.0%.
  • From 3,751.06 BRL to 4,664.68 BRL, the tax rate is 22.5%.
  • For anything above 4,664.68 BRL, the tax rate is 27.5%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Chile

Worldwide Income Tax: Yes

***Only tax residents are usually taxed on their worldwide income while foreigners working in Chile are only taxed on their income sourced from this country for the first 3 years and afterwards they are then taxed on their worldwide income.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • For anything lower than 13.5 tax units, the tax rate is 0%.
  • From 13.5 tax units to 30 tax units, the tax rate is 5%.
  • From 30 tax units to 50 tax units, the tax rate is 10%.
  • From 50 tax units to 70 tax units, the tax rate is 15%.
  • From 70 tax units to 90 tax units, the tax rate is 25%.
  • From 90 tax units to 120 tax units, the tax rate is 32%.
  • From 120 tax units to 150 tax units, the tax rate is 37%.
  • For anything above 150 tax units, the tax rate is 40%.

According to the source used above, the tax units are readjusted regularly, but one Chilean tax unit is roughly equal to 35,000 to 40,000 CLP.

Also, keep in mind that this is all based on a monthly basis. Meaning if you earn 150 tax units, that is roughly 5.5 million CLP or 11,600 USD. So if you earn 11,600 USD on a monthly basis, then you are taxed at the 40% rate.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Colombia

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • If less than 1,090 tax units, you are not subject to any tax.
  • Anything from 1,090 tax units to 1,700 tax units is subject to a 19% tax.
  • Anything from 1,700 tax units to 4,100 tax units is subject to a 28% tax.
  • Anything from 4,100 tax units to 8,670 tax units is subject to a 33% tax.
  • Anything from 8,760 tax units to 18,970 tax units is subject to a 35% tax.
  • Anything from 18,970 tax units to 31,000 tax units is subject to a 37% tax.
  • Anything over 31,000 tax units is subject to a 39% tax.

Note: Each tax unit is worth 35,607 Colombian pesos.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Costa Rica

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Any income up to 840,000 CRC is not taxable.
  • Any income from 840,000 CRC to 1,233,000 CRC is taxable at 10%.
  • Any income from 1,233,000 CRC to 2,163,000 CRC is taxable at 15%.
  • Any income from 2,163,000 CRC to 4,325,000 CRC is taxable at 20%.
  • Any income over 4,325,000 CRC is taxable at 25%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Cuba

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country according to this source here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Any income up to 10,000 CUP is taxed at 15%.
  • Any income from 10,000 CUP to 20,000 CUP is taxed at 20%.
  • Any income from 20,000 CUP to 30,000 CUP is taxed at 30%.
  • Any income from 30,000 CUP to 50,000 CUP is taxed at 40%.
  • Any income over 50,000 CUP is taxed at 50%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Dominican Republic

Worldwide Income Tax: Possibly.

***The Dominican Republic follows a territorial tax system where only your income earned from the Dominican Republic is taxable. However, if you become a tax resident in the Dominican Republic for 3 years, then your foreign income is also taxable according to this source here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Any income below 416,220 DOP is not taxable.
  • Any income from 416,220 DOP to 624,329 DOP is taxable at 15%.
  • Any income from 624,329 DOP to 867,123 DOP is taxable at 20%.
  • Any income beyond 867,123 DOP is taxable at 25%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Ecuador

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Income up to 11,270 USD is not taxable.
  • Income from 11,270 USD to 14,360 USD is taxable at 5%.
  • Income from 14,360 USD to 17,950 USD is taxable at 10%.
  • Income from 17,950 USD to 21,550 USD is taxable at 12%.
  • Income from 12,550 USD to 43,100 USD is taxable at 15%.
  • Income from 43,100 USD to 64,630 USD is taxable at 20%.
  • Income from 64,630 USD to 86,180 USD is taxable at 25%.
  • Income from 86,180 USD to 114,890 USD is taxable at 30%.
  • Anything beyond 114,890 USD is taxable at 35%.

El Salvador

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Any income up to 4,064 USD is not taxable.
  • Any income from 4,064 USD to 9,142.86 USD is taxable at 10%.
  • Any income from 9,142.86 USD to 22,857.14 USD is taxable at 20%.
  • Any income beyond 22,857.14 USD is taxable at 30%.

Guatemala

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0 GTQ to 300,000 GTQ, the tax rate is 5%.
  • For anything over 300,000 GTW, the tax rate is 7%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Honduras

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0.01 HN to 198,995.06 HN, the tax rate is 0%.
  • From 198,995.07 HN to 242,439.28 HN, the tax rate is 15%.
  • From 242,439.29 HN to 563,812.30 HN, the tax rate is 20%.
  • For anything above 563,812.31, the tax rate is 25%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Mexico

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from this country.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0.01 MXN to 6,942.35 MXN, the tax rate is 1.92%.
  • From 6,942.36 MXN to 58,922.27 MXN, the tax rate is 6.40%.
  • From 58,922.28 MXN to 103,550.51 MXN, the tax rate is 10.88%.
  • From 103,550.52 MXN to 120,372.95 MXN, the tax rate is 16.00%.
  • From 120,372.96 MXN to 144,119.39 MXN, the tax rate is 17.92%.
  • From 144,119.40 MXN to 290,667.83, the tax rate is 21.36%.
  • From 290,667.84 MXN to 485,132.39 MXN, the tax rate is 23.52%.
  • From 485,132.40 MXN to 874,650.11 MXN, the tax rate is 30.00%.
  • From 874,650.12 MXN to 1,166,200.07 MXN, the tax rate is 32.00%.
  • From 1,166,200.08 MXN to 3,498,600.11 MXN, the tax rate is 34.00%.
  • Anything above 3,498,600.12 MXN, the tax rate is 35.0%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Nicaragua

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • From 0 NIO to 100,000 NIO, the tax rate is 0%.
  • From 100,000 NIO to 200,000 NIO, the tax rate is 15%.
  • From 200,000 NIO to 350,000 NIO, the tax rate is 20%.
  • From 350,000 NIO to 500,000 NIO, the tax rate is 25%.
  • For anything above 500,000 NIO, the tax rate is 30%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Panama

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

They will tax you 15% from 11,000 USD to 50,000 USD and 25% for anything above 50,000 USD.

Paraguay

Worldwide Income Tax: No

Personal Income Tax: The source for this information is here and the tax rate is the following below.

They do have a 10% tax for any income source from Paraguay that is beyond “36 monthly minimum salaries” or roughly 13,000 USD.

Peru

Worldwide Income Tax: Yes

***The situation in Peru is a little bit different. Instead of being based on your residence, your exposure to worldwide income tax is based on your domicile. If you are domiciled in Peru, then you are exposed to their worldwide income tax. If not, then you are only taxed on your Peruvian sourced income according to this source here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Up to 5 tax units, the tax rate is 8%.
  • From 5 tax units to 20 tax units, the tax rate is 14%.
  • From 20 tax units to 35 tax units, the tax rate is 17%.
  • From 35 tax units to 45 tax units, the tax rate is 20%.
  • For anything over 45 tax units, the tax rate is 30%.

According to the source above, a tax unit in 2020 is equivalent to 4,300 Peruvian soles.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Puerto Rico

Worldwide Income Tax: Yes

***Only tax residents are taxed on their worldwide income while non-residents are only taxed on their income sourced from Puerto Rico.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Income up to 9,000 USD is not taxable.
  • Income from 9,000 USD to 25,000 USD is taxable at 7%.
  • Income from 25,000 USD to 41,500 USD is taxable at 14% plus 1,120 USD.
  • Income from 41,500 USD to 61,500 USD is taxable at 25% plus 3,430 USD.
  • Income over 61,500 USD is taxable at 33% plus 8,430 USD

Uruguay

Worldwide Income Tax: No

***Note: Any income earned from financial instruments anywhere in the world, such as interest and dividends, is taxed at 12% -- according to this source here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Income up to 379,596 UYU is not taxable.
  • Income from 379,596 UYU to 542,280 UYU is taxable at 10%.
  • Income from 542,280 UYU to 813,420 UYU is taxable at 15%.
  • Income from 813,420 UYU to 1,626,840 UYU is taxable at 24%.
  • Income from 1,626,840 UYU to 2,711,400 UYU is taxable at 25%.
  • Income from 2,711,400 UYU to 4,067,100 UYU is taxable at 27%.
  • Income from 4,067,100 UYU to 6,236,200 UYU is taxable at 31%.
  • Income over 6,236,200 UYU is taxable at 36%.

Note: All currencies above are in the local currency of this specific country. Since exchange rates change by the day, I will simply include here a link to the Google conversion rate so you can plug in the numbers yourself.

If your currency isn’t in USD, then just change USD for whatever your currency is obviously.

Venezuela

Worldwide Income Tax: Yes

***Tax residents are subject to worldwide income tax. Foreign residents “with a fixed base in Venezuela” have to pay a tax on income from a “national or foreign source attributable to said base.” While non-residents are only paying taxes on income that is tied to Venezuela. Source for that is here.

Personal Income Tax: The source for this information is here and the tax rate is the following below.

  • Anything from 0 tax units to 1,000 tax units is taxed at 6%.
  • Anything from 1,000 tax units to 1,500 tax units is taxed at 9%.
  • Anything from 1,500 tax units to 2,000 tax units is taxed at 12%.
  • Anything from 2,000 tax units to 2,500 tax units is taxed at 16%.
  • Anything from 2,500 tax units to 3,000 tax units is taxed at 20%.
  • Anything from 3,000 tax units to 4,000 tax units is taxed at 24%.
  • Anything from 4,000 tax units to 6,000 tax units is taxed at 29%.
  • Anything over 6,000 tax units is taxed at 34%.

The most recent value of a tax unit, according to this source here, is 1 tax unit is worth 50 Venezuelan Bolivares.

Well, that’s all the information I could find!

If you have anything to add regarding this information – something missing or needing updating – let me know in the comment section.

Or write a comment if you liked the article also.

And follow my Twitter here.

Thanks

Best regards,

Matt

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