In this article, we will review the general provisions regarding the technique for the determination of Income Tax (IR) on capital gains and losses in accordance with the Tax Agreement Law (“LCT“) and its Regulations (“RLCT“), applicable to taxpayers not exempted by Art. 77 LCT, with respect to non-exempt income established in Art. 79 LCT or special legal provisions.
Art. 3 LCT establishes that IR is levied on Nicaraguan source income from capital gains. Art. 15 LCT defines capital gains and losses as “the variations in the value of the taxpayer’s assets and liabilities, as a consequence of the alienation of assets, or assignment or transfer of rights. Likewise, capital gains are those coming from games, bets, donations, inheritances and legacies, and any other similar income”. For its part, Art. 16 LCT regulates the economic ties of income from capital gains and losses from Nicaraguan sources, establishing a list of this type of income comprising two assumptions:
-
- Those obtained in Nicaragua, by residents and non-residents.
- Those accrued or received outside the national territory by residents, provided they come from assets and capital of Nicaraguan origin.
