Tax on property income in Bolivia
December 15, 2016
Effective Tax Rate on Rental Income
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Global Property Guide research
Nonresidents are taxed on their Bolivian-sourced income. Married couples are taxed separately.
Income earned by nonresidents is taxed at the corporate tax rate of 25%. The taxable income is gross income less expenses and other deductions.
For self-employed professionals, their net income is deemed to be 50% of their gross income; therefore, the effective tax rate for professionals is 12.5% (25% tax on 50% of gross income).
Rental income earned by nonresidents is taxed at 25%. Net rental income is presumed to be 50% of the gross income; therefore the effective income tax rate is 12.5% on the gross rental income (25% tax on 50% of the gross income). This is the final tax liability of nonresidents, withheld by the tenant.
Capital gains earned by nonresidents through selling a Bolivian property are taxed at corporate income tax rate of 25%. Net capital gain is presumed to be 50% of the gross gains; therefore the effective income tax rate is 12.5% on the gross rental income (25% tax on 50% of the gross income).
Value Added Tax (VAT)
The VAT is levied on the leasing of Bolivian real estate at the standard VAT rate of 13%. The taxable income is the net rental income, deemed to be 50% of the gross rent.
Property Tax (Impuesto a la propiedad de bienes inmuebles)
The property tax is levied on the assessed cadastral value of the property, as determined by the local tax authorities. The tax rates are progressive, depending on the property value.
|TAX BASE, BOB (US$)||TAX RATE|
|Up to 200,000 (US$28,986)|
|200,000 – 400,000 (US$57,971)|
|400,000 – 6 million (US$869,565)|
|Over 6 million (US$869,565)|
|Source: Global Property Guide|
Corporate income tax is levied on income and capital gains earned by companies at 25%. Expenses incurred in generating and necessary in maintaining such profits are deductible.