Nicaragua Corporate Tax Guide 2026

Overview — Corporate Tax in Nicaragua

Corporate tax in Nicaragua is governed by the Tax Code (Código Tributario) and the Income Tax Law (Ley de IR), administered by the Dirección General de Ingresos (DGI). A company is tax resident in Nicaragua if it is incorporated under Nicaraguan law or if its place of effective management is in Nicaragua. Resident companies are taxed on Nicaraguan-source income; non-resident companies are taxed only on Nicaraguan-source income. The standard tax year is the calendar year. Companies must register for tax with DGI and obtain a Registro Único de Contribuyentes (RUC). Annual CIT returns must be filed within 2 months after the fiscal year-end.

Standard Corporate Tax Rate — 30%

The standard corporate income tax rate in Nicaragua is 30% of taxable profits for resident companies. Taxable profit is calculated as gross revenue less allowable deductions including operating expenses, depreciation, interest costs, and losses carried forward. Losses may be carried forward for up to 3 years. No foreign tax credit is available — the territorial system means foreign-source income is not taxed, and no credit is given for foreign taxes paid.

Alternative Minimum Tax (AMT) — 1–3%

Nicaragua imposes an Alternative Minimum Tax (AMT) calculated on gross income. Taxpayers must pay the higher of the standard CIT or the AMT. The AMT rate depends on the taxpayer classification:

• 3% — Large taxpayers with annual revenue exceeding NIO 160 million
• 2% — Main taxpayers with annual revenue between NIO 60 million and NIO 160 million
• 1% — Other taxpayers with annual revenue below NIO 60 million

The AMT is calculated on gross income (total revenue) before any deductions. If the standard CIT exceeds the AMT, only the CIT is payable. The AMT is not creditable against future CIT liabilities. This system ensures a minimum tax contribution from all businesses.

Loss Carryforward

Tax losses may be carried forward for up to 3 years from the year in which the loss was incurred. The loss can be offset against taxable profits in subsequent years. Losses must be properly documented and reported on the annual CIT return. There is no carryback of losses. Companies undergoing substantial ownership changes may have loss carryforward restrictions.

Tax Depreciation — Capital Allowances

Nicaragua allows depreciation deductions on fixed assets at prescribed rates under the Income Tax Law. Buildings and structures: 5% per annum (straight-line). Machinery and equipment: 15% per annum (straight-line). Vehicles and computers: 25% per annum (straight-line). Intangible assets: amortised over the useful life as approved by DGI. Goodwill is not amortisable for tax purposes.

FAQs

When is the corporate tax filing deadline?

Annual CIT returns must be filed within 2 months following the end of the fiscal year (by 31 March for calendar year taxpayers). Monthly advance payments of 1–3% of gross income are required during the year.

Can a foreign company operate through a branch?

Yes, foreign companies may establish a branch in Nicaragua. The branch is taxed at 30% on its Nicaraguan-source profits. Branches must register with DGI and obtain an RUC.

What is the thin capitalisation rule?

Nicaragua has thin capitalisation rules that limit interest deductions on related-party debt. The debt-to-equity ratio must not exceed 3:1 for related-party loans. Excess interest is disallowed.

Are capital gains subject to CIT?

Yes, capital gains are included in taxable income and taxed at the standard CIT rate of 30%. Alternatively, a definitive 15% withholding tax may apply to certain capital gains. Occasional gains may be taxed at 10%.

Disclaimer

This guide provides general information about Nicaraguan corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Nicaraguan tax advisor or the Dirección General de Ingresos for advice specific to your situation. InvestmentKit does not provide tax advice.