On December 23, 2022, Executive Decree No. 43852-H was published in the official newspaper La Gaceta setting forth the new brackets of the single tax on income received for personal dependent work or retirement or pension and other remuneration for personal services (Salary Tax), the tax credits for individuals with lucrative activities (Tax Credits) and the new tax brackets for legal entities (Income Tax) to take effect from January 1, 2023.
The applicable income brackets for the Salary Tax are as follows:
| INCOME | TAX RATE |
|---|---|
| Up to ¢941,000 | Exempt |
| From ¢941,000 up to ¢1,381,000 | 10% |
| From ¢1,381,000 up to ¢2,423,000 | 15% |
| From ¢2,423,000 up to ¢4,845,000 | 20% |
| Over ¢4,845,000 | 25% |
The decree also modifies the tax credits for the Salary Tax. Employees can opt for a spousal credit or credit for each minor child or student under 25 years of age, as follows:
| TAX CREDIT | MONTHLY AMOUNT |
|---|---|
| Spouse | ¢2,65o |
| Per child | ¢1,750 |
Regarding legal entities, the new Income Tax brackets are as follows:
| INCOME | TAX RATE |
|---|---|
| Up to ¢5,761,000 | 5% |
| From ¢5,761,000 up to ¢8,643,000 | 10% |
| From ¢8,643,000 up to ¢11,524,000 | 15% |
| Over ¢11,524,000 | 20% |
However, when the company has a gross annual income that exceeds ¢122,145,000 (approx. $202,000), the applicable rate is 30% without applying the progressive rate table.
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