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Nicaragua VAT (IVA) Guide 2026

Nicaragua's value-added tax (IVA — Impuesto al Valor Agregado) applies a standard rate of 15% on most goods and services. Exports are zero-rated (0%), and certain basic necessities are exempt. The ISC (Selective Consumption Tax) applies to alcohol, tobacco, and luxury goods at rates of 9–60%. There is no VAT registration threshold — any person making taxable supplies must register. VAT is administered by the Dirección General de Ingresos (DGI).

Overview — IVA in Nicaragua

Value-added tax (IVA) in Nicaragua is governed by the Tax Code and administered by the Dirección General de Ingresos (DGI). IVA applies to the supply of goods and services by taxable persons in Nicaragua and to imports of goods. The standard IVA rate is 15%. There is no registration threshold — any person or entity making taxable supplies in Nicaragua must register for IVA. IVA returns are filed monthly. Nicaragua also imposes the ISC (Impuesto Selectivo de Consumo) on specific goods.

Standard Rate — 15%

The standard IVA rate of 15% applies to most supplies of goods and services in Nicaragua. IVA is calculated as 15% of the taxable value of the supply. Businesses registered for IVA must charge IVA on their sales (output IVA) and can claim credit for IVA paid on their purchases (input IVA). The net IVA payable is output IVA minus input IVA. If input IVA exceeds output IVA in a given month, the excess can be carried forward or claimed as a refund under certain conditions.

Zero-Rated Supplies — 0%

The following supplies are zero-rated (0% IVA) in Nicaragua: exports of goods and services, international transportation services, and certain supplies related to international trade. Zero-rated supplies allow businesses to claim input IVA credits while charging no IVA on their output. Exporters can claim refunds of input IVA incurred in producing exported goods. Businesses must maintain proper documentation to evidence export transactions.

Exempt Supplies

Certain goods and services are exempt from IVA in Nicaragua, meaning no IVA is charged and input IVA on related purchases cannot be claimed. Exempt supplies include: medicines and pharmaceutical products, real estate transfers (certain conditions), basic food staples, education services, healthcare services, and financial services. Businesses making only exempt supplies are not required to register for IVA.

Selective Consumption Tax (ISC) — 9–60%

Nicaragua imposes the ISC (Impuesto Selectivo de Consumo) on specific goods in addition to IVA. ISC rates include:

  • Alcohol and alcoholic beverages: 9–30% depending on type and alcohol content
  • Tobacco products: Up to 60%
  • Luxury goods: Variable rates
  • Sugary drinks: Specific rates applicable

The ISC is calculated on the tax base (generally the ex-factory or import value) and is payable at the time of import or sale by the manufacturer.

IVA Registration

There is no VAT registration threshold in Nicaragua — any person or entity making taxable supplies must register for IVA with the DGI. Registration is done through the DGI offices, and the taxpayer receives a Registro Único de Contribuyentes (RUC). Non-resident businesses providing digital services to Nicaraguan customers may also be required to register for IVA. Failure to register when required can result in penalties including back-assessment of IVA plus interest.

IVA Filing and Payment

IVA returns must be filed monthly by the 15th of the month following the taxable period. Filing is done through the DGI online system. The return must include total output IVA, input IVA claimed, and net IVA payable or refundable. Late filing attracts penalties and monthly interest on unpaid tax. Businesses must retain IVA records and invoices for the periods specified by the Tax Code.

FAQs

Can I claim IVA refunds as an exporter?

Yes, exporters can claim refunds of input IVA incurred in producing exported goods. Refund claims are subject to DGI audit and verification.

What is the penalty for late IVA filing?

Late filing attracts penalties as determined by the Tax Code, plus monthly interest on the unpaid amount. Repeated non-compliance may result in suspension of the RUC.

Is IVA applicable to digital services?

Yes, non-resident digital service providers supplying services to Nicaraguan customers are required to register for IVA and charge 15% IVA.

What records must be kept for IVA purposes?

Registered businesses must maintain sales ledgers, purchase ledgers, IVA invoices, import/export documents, and bank statements. All records must be available for DGI audit upon request.

Disclaimer

This guide provides general information about Nicaraguan IVA 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.