BoliviaTax Obligations Detailed

In Bolivia, employers face various tax obligations, including corporate income tax, value-added tax, and social security contributions.

Corporate Income Tax (IUE)

• Tax Rate: The general corporate income tax rate is 25%.
• Additional Rates: A 12.5% surtax applies to mining companies. Banks, insurance companies, and other financial institutions face a 25% surtax if their return on equity exceeds 6%. An additional 7.5% rate applies to mining companies engaged in manufacturing activities that add value to raw minerals.
• Tax Period: The tax period aligns with the fiscal year, which may vary depending on the industry (e.g., March 31 for industrial and oil/gas companies, June 30 for agricultural companies).
• Filing and Payment Deadline: The annual tax return and payment are due within 120 days following the fiscal year-end.

Value-Added Tax (VAT)

• Rate: The standard VAT rate is 13%.
• Tax Period: The VAT tax period is monthly.
• Filing and Payment Deadline: The return must be filed, and payment made, in the month following the taxable transaction. The specific due date is determined by the last digit of the company's tax identification number.

Social Security Contributions

• Employer Contributions: Employers contribute 16.71% of an employee's gross salary to social security. This rate increases to 19.51% for mining companies.
• Employee Contributions: Employees contribute 12.71% of their gross salary.
• Additional Employee Contributions: Employees also contribute to the National Solidarity Fund with rates tiered based on income: 1% for earnings between BOB 13,000 and BOB 24,999, 5% between BOB 25,000 and BOB 34,999, and 10% for earnings exceeding BOB 34,999.
• Housing Fund: Employers contribute 2% of the employee's gross salary to the National Housing Fund.

Complementary VAT Regime (RC-IVA)

• Withholding: Employers withhold 13% of employees' gross salaries as RC-IVA. The tax is withheld monthly, after pension fund contributions and other deductions.
• Gross Salary: Includes base salary, commissions, bonuses, allowances, and other cash or in-kind compensation.

Other Taxes

• Excise Tax: Applies to specific goods such as cigarettes, soft drinks, and alcoholic beverages, with rates varying by product.
• Financial Transaction Tax (FTT): A 0.30% tax levied on bank transactions within the domestic financial system, effective until fiscal year 2028.
• Special Tax on Lottery and Gambling Games: A specific tax applies to lottery and gambling operations.

This information is current as of February 5, 2025, and may be subject to change. It's important to consult with a tax professional for personalized advice.

In Bolivia, employers are responsible for deducting various taxes from employee salaries, including income tax and social security contributions. These deductions are submitted to the relevant Bolivian tax authorities.

Income Tax (Impuesto sobre las Utilidades de las Empresas - IUE)

Bolivian income tax, also known as RC-IVA (Régimen Complementario al Impuesto al Valor Agregado), is a flat rate of 13% of an employee's gross taxable income. As of 2025, there is no tax-exempt bracket or personal allowance. Employers withhold this tax and remit it to the National Tax Service (Servicio de Impuestos Nacionales - SIN). The tax period is quarterly, ending on March 31st, June 30th, September 30th, and December 31st.

Social Security Contributions

Employees earning above BOB 13,000 contribute to social security through several channels:

• Long-term Social Security (Disability, Old Age, and Death): 10% of gross salary

• Common Risk (Riesgo Común): 1.71% of gross salary

• Pension Fund Commission (Comisión de las AFPs): 0.5% of gross salary

• Solidarity Contribution for Pensions (Aporte Solidario): 0.50% of the gross salary. This contribution may also take the form of tiered rates for those making above Bs 13,000 as follows:

  • 1% for monthly earnings between Bs 13,000 and Bs 24,999
  • 5% for monthly earnings between Bs 25,000 and Bs 34,999
  • 10% for monthly earnings above Bs 35,000

• There is a cap of 60 times the national minimum wage on contributions for long-term, common risk, and pension fund contributions.

Employer Contributions

Employers also contribute to social security on behalf of their employees:

• Housing Fund (Fondo de Vivienda): 2% of the employee's gross salary
• Risk Premium (Prima de Riesgo Profesional): 1.71% of the employee's gross salary
• Healthcare (Caja Nacional de Salud): 10% of the employee's gross salary
• Solidarity Contribution (Aporte Solidario): 3% of the employee's gross salary.

Aguinaldo (13th-month Salary)

Employees are entitled to a 13th-month salary (Aguinaldo) paid in December. This payment is exempt from both income tax and social security contributions. There may also be a mandatory 14th-month salary if certain economic conditions are met, such as the national GDP exceeding 4.5%.

Deductions

While employees cannot deduct general expenses for income tax purposes, they can deduct their social security contributions and utilize VAT credits for personal consumption.

Other Considerations

• It is crucial for employers to register with the relevant tax authorities and adhere to all reporting and payment deadlines to avoid penalties.
• As tax laws and regulations can change, this information is based on the understanding of Bolivian tax regulations as of February 5, 2025. It is advisable to consult official sources or a qualified tax advisor for the most up-to-date information.

Value Added Tax (VAT), known as Impuesto al Valor Agregado (IVA) in Bolivia, is a consumption tax levied on most goods and services.

VAT Rates

• Standard Rate: 13% (This is included in the final price, resulting in an effective rate of 14.94% calculated as 13%/87%).
• Zero Rate: 0% applies to exports, mining cooperatives with state contracts, small private mining companies with state contracts, and physical books.
• Exempt: Financial services (certain exceptions exist); tourism services for non-residents. Capital goods and industrial plant supplies are also zero-rated for the 2025 calendar year.

VAT Registration

• Threshold: There is no registration threshold. All businesses making taxable supplies in Bolivia, regardless of turnover, are required to register for VAT. This includes non-resident businesses.
• Process: Businesses must obtain a Tax Identification Number (NIT - Número de Identificación Tributaria) by submitting Form 001 to the National Tax Service (SIN - Servicio de Impuestos Nacionales). Supporting documents are required, such as the articles of incorporation and proof of address. Online registration is available. Foreign companies cannot voluntarily register for VAT unless they have a permanent establishment in Bolivia.

VAT Filing and Compliance

• Returns: VAT returns are filed monthly. Due dates are staggered between the 13th and the 22nd of the following month.
• E-invoicing: Electronic invoicing is mandatory and was progressively rolled out, starting in 2021. Taxpayers must use the Sistema de Facturación Electrónica (SFE) system, through which invoices are validated and digitally signed by the SIN. Deadlines for each group of taxpayers were released in stages. The 9th wave to join the SFE commenced on March 1, 2025.
• Invoices: Must include details such as supplier and customer information (including NITs), invoice date and number, description of goods/services, unit prices, VAT rate and amount, gross amount, and QR code from the SFE. Invoices can be issued in foreign currency but must include the Boliviano equivalent.
• Time of Supply: For goods, VAT is due at the time of delivery or transfer of ownership. For services, it's due upon invoice payment or service provision, whichever is earlier. Import VAT is due upon customs clearance.

Exempt Goods and Services

Some examples include:

• Goods imported by members of the diplomatic corps
• Life insurance
• Transfers of goods or assets subject to securitization
• Certain financial intermediation services, insurance, and pensions
• Interest from loans received by financial entities
• Artistic events
• Sale of physical books (digital books are typically subject to VAT)

Additional Indirect Taxes

• Excise Tax (ICE - Impuesto al Consumo Específico): Levied on specific goods like cigarettes, tobacco, alcoholic beverages, and certain vehicles. Rates vary depending on the product (e.g. fixed amounts per liter for alcoholic beverages, ad valorem rates from 10% to 55% for vehicles).
• Special Tax on Hydrocarbons and Derived Products: Applies to the sale of these products within the local market.
• Direct Tax on Hydrocarbons (IDH - Impuesto Directo a los Hidrocarburos): Levied on hydrocarbon production.

This information is current as of February 5, 2025, and might be subject to change. Consulting with a tax professional is recommended for personalized guidance.

Bolivian tax incentives for 2025 focus on stimulating specific sectors and reinvestment.

Corporate Tax Incentives

• Reinvestment of Profits/Dividends: Reduced withholding tax rates apply to reinvestments of profits or dividends earned in Bolivia:
  • 75% or greater reinvestment: 3.125%
  • 50% to 74.99% reinvestment: 6.25%
  • 25% to 49.99% reinvestment: 11.25%
• Import and Sale of Capital Goods:
  • VAT exemption on imports of capital goods and industrial plants for the agricultural and industrial sectors.
  • Zero-rate VAT on domestic sales of these goods for agricultural, construction, mining, and industrial sectors. As of today (February 5, 2025), specific goods qualifying for this incentive are detailed in Supreme Decree No. 5302, which regulates Law 1613 (General State Budget 2025).
• Regional Manufacturing Incentives (Select Jurisdictions): Some regions, like Oruro and Potosí, offer incentives for manufacturing investments, including exemptions from import tariffs, VAT on certain machinery, transaction tax, and CIT, subject to specific conditions. Details about the conditions and application procedure are not available in provided source materials. El Alto also provides specific incentives, such as those applicable to inputs and equipment for new production processes. Consult local authorities in each jurisdiction for specifics.
• Other Incentives:
  • Tourist and lodging services provided by hotels to foreign tourists without Bolivian residency are VAT-exempt.
  • Imports and sales of books, magazines, and newspapers are VAT-exempt or zero-rated.

Individual Tax Incentives

• VAT Reimbursement: Individuals with average monthly incomes up to BOB 9,000 can receive a 5% reimbursement on purchases included in fiscal invoices. Further information about the conditions and registration procedures is unavailable in the provided sources. Contact Bolivian tax authorities for details.

General Tax Information

• Corporate Income Tax (CIT): The general CIT rate is 25%. Additional rates apply to specific sectors, such as mining (12.5% surtax) and financial institutions (25% surtax under certain conditions).
• Value Added Tax (VAT): The general VAT rate is 13%, effectively 14.94% as it is included in the final price.
• Transaction Tax: A 3% transaction tax is levied on the gross income from sales of goods and services.
• Tax on Great Fortunes: This tax applies to individuals (residents and non-residents) exceeding a specified net wealth threshold. The exact threshold for 2025 is not mentioned in the given sources, and it may have been adjusted from earlier years.

This information is based on available resources as of today, February 5, 2025, and may be subject to change. Consulting a tax professional or the relevant Bolivian authorities for the most up-to-date details is recommended.