Honduras Cross-Border Tax Guide 2026

Overview — Cross-Border Taxation in Honduras

Honduras's cross-border tax rules are governed by the Código Tributario and the Ley del Impuesto Sobre la Renta. The Servicio de Administración de Rentas (SAR) has been strengthening its international tax capacity. Multinational enterprises operating in Honduras must comply with transfer pricing documentation requirements, thin capitalisation rules, and withholding tax obligations. Non-residents earning Honduras-source income are generally subject to withholding taxes at statutory rates, which may be reduced under applicable treaties.

Transfer Pricing

Honduras has transfer pricing rules requiring that transactions between related parties be priced at arm's length. Related parties include companies under common control, parent-subsidiary relationships, and individuals with significant influence. Documentation requirements include a local file with detailed analysis of related-party transactions. Acceptable transfer pricing methods include the Comparable Uncontrolled Price (CUP) method, Cost Plus method, Resale Price method, Transactional Net Margin Method (TNMM), and Profit Split method. Advance Pricing Agreements (APAs) may be available for qualifying taxpayers.

Thin Capitalisation

Honduras has thin capitalisation rules that limit interest deductions on related-party debt. The maximum allowable debt-to-equity ratio is 3:1. Interest on debt exceeding this ratio may be disallowed as a deduction. The rules apply to related-party debt, including loans from foreign parent companies and sister companies. Certain long-term financing from approved financial institutions may be exempt.

Withholding Taxes to Non-Residents

Payments to non-residents from Honduras-source income are subject to withholding tax at the following rates (treaty rates may apply):

• Dividends — 10% (may be reduced under DTTs)
• Interest — 10% (may be reduced under DTTs)
• Royalties — 15% (may be reduced under DTTs)
• Technical & management fees — 12.5%
• Branch profits remittance — 10%

The payer must withhold the tax and remit it to SAR. A withholding tax certificate must be issued to the non-resident. Treaty relief requires the non-resident to provide a Certificate of Tax Residency.

Double Tax Treaties — Practical Application

Honduras has double tax treaties with Spain and Mexico, following the OECD Model Convention. To claim treaty benefits, a non-resident must obtain a Certificate of Tax Residency from the home country tax authority, submit a treaty relief application to SAR, provide the certificate to the Honduran withholding agent, and wait for SAR approval (typically 2–4 weeks). Treaty benefits include reduced withholding tax rates and potential exemption from tax on certain types of income.

FAQs

Do I need to register for tax in Honduras as a non-resident investor?

Non-residents earning Honduras-source income subject to final withholding tax generally do not need to register. However, a non-resident with a permanent establishment must register and file returns.

How do I claim a refund of excess WHT?

A non-resident may claim a refund if WHT was deducted at the full statutory rate when a reduced treaty rate should have applied. Submit a refund claim to SAR with supporting documents.

Does Honduras have a General Anti-Avoidance Rule (GAAR)?

Yes, the Código Tributario includes a GAAR that allows SAR to recharacterise transactions entered into for tax avoidance purposes.

Disclaimer

This guide provides general information about Honduran cross-border taxation for the 2026 tax year. Tax laws and treaty provisions may change. Always consult with a qualified Honduran international tax advisor or the Servicio de Administración de Rentas for advice specific to your situation. InvestmentKit does not provide tax advice.