Nicaragua · Tax on foreign income
Does Nicaragua tax foreign income? A guide for Americans
Short answer
Tax is territorial, so a retiree's US pension, Social Security and interest aren't taxed. Remote work done in Nicaragua is taxed: 20% of gross pay at first, up to 30% after 180 days.
What you'd pay, by situation
| Retiree on US income $0 a year | US Social Security, pensions and US interest aren't taxed, however long you stay. |
|---|---|
| Remote worker paid from the US About $3,000 on 90 days of a $60,000 salary; about $16,200 all year | Work done in Nicaragua is taxed even if it's paid from the US: 20% of gross pay at first, up to 30% after 180 days. |
| Working for a local employer Residents 0–30%; non-residents 20% | Residents pay 0–30%, with about $2,700 a year tax-free. Non-residents pay 20% of gross pay. |
Not yet verified Read in a 2018 copy of the tax law; later changes aren't read in full.
How it works
- Tax residence: more than 180 days in a calendar year.
- What's taxed: only income from Nicaragua, for residents and non-residents alike. Work done here counts, wherever you're paid.
- Filing: how someone paid only by a US employer files and pays is Not established yet
- No US tax treaty or Social Security agreement: Nicaraguan tax paid may be credited on your US return; see a tax adviser.
- Your US return: you still file every year, wherever you live.
Taxes in Nicaragua, with worked examples → The full Nicaragua guide →
Questions people ask
Does Nicaragua tax US Social Security and pensions?
US Social Security, pensions and US interest aren't taxed, however long you stay.
Remote worker paid from the US in Nicaragua: what would I pay?
Work done in Nicaragua is taxed even if it's paid from the US: 20% of gross pay at first, up to 30% after 180 days. Ballpark: About $3,000 on 90 days of a $60,000 salary; about $16,200 all year.
Working for a local employer in Nicaragua: what would I pay?
Residents pay 0–30%, with about $2,700 a year tax-free. Non-residents pay 20% of gross pay. Ballpark: Residents 0–30%; non-residents 20%.