Income tax on rent, worked example, in Nicaragua

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Non-resident couple's joint income1
Monthly Rental Income2 1,500 6,000 12,000
Annual Rental Income 18,000 72,000 144,000
Less Expenses3 30 5,400 21,600 43,200
= Taxable Income US$12,600 US$50,400 US$100,800
Income Tax4
Flat rate 15% 1,890 7,560 15,120
Annual Income Tax Due 1,890 7,560 15,120
Tax Due as % of Gross Income 10.50% 10.50% 10.50%
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DISCLAIMER: The information contained above is for illustration only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on May 10, 2016.


1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).

2 Exchange rate used: 1.00 US$ = 28.50 NIO

3 A standard deduction of 30% of the gross rent is available to nonresidents earning rental income to account for income-generating expenses.

4 Nonresident individuals earning rental income are taxed at a flat rae of 15%, withheld by the tenant. Only 70% of the rental incomeearned by nonresidents is taxed.