El Salvador has removed income tax from its original of 30% to 0% for international investments and money transfers
El Salvador has removed income tax from its original of 30% to 0% for international investments and money transfers
The Legislative Assembly of El Salvador has passed a law to reduce the income tax on foreign investments and remittances from 30% to 0%, with no effective limits on the amount.
President Nayib Bukele announced the news on the social media platform X in a post on March 12:
"Congress has reformed our income tax law for international investments and money transfers, reducing the rate from 30% to 0%."
In a separate post on X, the Asamblea Legislativa, the legislative assembly of El Salvador, stated that the measure was approved with 69 votes, presumably out of 84 (excluding any abstentions or absent votes).
According to a translation from Spanish by Google:
"With 69 votes in favor, we reform the Income Tax Law so that family remittances or any capital from abroad can be introduced into the country free of payment of this tax, regardless of the amount."
El Salvador has undergone significant changes since Bukele's election in 2019. In 2021, he declared Bitcoin legal tender throughout the country and purchased 200 BTC for its reserves. In the following years, El Salvador's economy has shown steady growth. In 2019, its gross domestic product was $24.9 billion, according to the World Data Bank. By 2022, it had reached $32.4 billion. Estimates also suggest 2.8% growth for 2023.
El Salvador's 2021 Bitcoin purchase has generated $85 million in profit since BTC crossed the $72,000 threshold in the week of March 10.