Few countries offer as light a tax burden as Nicaragua.
For individuals, income tax (IR) is calculated on a progressive tax rate, up to a maximum of 30%. Taxable income is based on Nicaraguan-source income. As a foreign retiree, you pay no taxes on out-of-country earnings.
Value added tax
This tax applies to the following acts performed in the national territory: sales of goods, providing of services, and importation of goods. It is calculated at a flat rate of 15% on the value of the goods or services. If you own a business the value-added tax will be returned to you.
Property transfers are subject to a 1%-3% pre-payment income tax on the purchase price. While most sellers ask the buyer to pay it, you should be aware that it is a pre-payment of income tax; therefore, it is legally payable by the seller.
Real estate tax
Annual property taxes are approximately 1% of the 80% of the municipal cadastral value of the property. The cadastral value of the land is calculated substantially lower than the market price of the land.