Living in Nicaragua: 180-day residency requirement, income tax scale, and withholding tax.

In Nicaragua, an individual is considered a tax resident if they reside in the country for more than 180 days during the calendar year or if their primary economic activity is located there. This criterion is defined in Article 7 of Law 822 on Tax Consultation, the text of which is published in Gaceta No. 240 of December 18, 2014 (Law 891). Income from employment is taxed on a progressive scale from 0 to 30 13T (in córdobas). For capital income, several tax administration documents indicate 15 13T, while another cites 10 13T for certain categories. Other laws have amended Law 822 since 2014, and their texts are not discussed here; this page indicates these limits where relevant. It does not address assets, local savings, or visas.

Article 7: more than 180 days, or the center of economic interest

Official Gazette No. 240 of December 18, 2014, publishes Law 891, which amends Law 822, and reproduces Article 7 entitled "Residente." This Article 7 defines, "for tax purposes," a resident individual. An individual is considered a resident in the following cases:

• a person, national or foreign, who comes from outside and remains on the territory for more than 180 days in the calendar year, even without continuity, according to what the regulation provides; ;
• a person whose center of economic or main interest is located in the country, unless they establish their residence or tax domicile in another country by means of a certificate from the competent tax authorities; ;
• certain people of Nicaraguan nationality who have their habitual residence abroad, such as members of diplomatic and consular missions, as well as certain foreign agents stationed in Nicaragua in the absence of reciprocity.

The text adds a reservation on the certificate: when the country is considered a "tax haven", the Nicaraguan administration does not accept the validity of the certificate, unless the taxpayer proves otherwise.

The administration's (DGI) FAQ also cites the rule of more than 180 days, referring to article 7, number 1, of law 822, in the answer on a foreign advisor to a public institution.

Five laws are listed by the Ministry of Finance among the texts that reform Law 822: Laws 891, 922, 987, 1212, and 1279. Only Law 891 is presented here, and the connection between Article 7 and the reform it enacts has not been established. Therefore, the criteria of Article 7 must be confirmed with the General Directorate of Taxes (DGI) before any decision is made.

Resident or non-resident: who pays income tax on employment

The General Directorate of Taxes (DGI) states that individuals, whether resident or non-resident, who receive income from employment on a regular or occasional basis are considered taxpayers. According to its guide, employers are required to withhold a certain amount each month as an advance on the annual income tax owed by the employee.

Work income scale

The DGI publishes the progressive scale of article 23 of law 822, in force since January 1, 2013. It applies to net annual income, in córdobas (C$).

Two pages from the French Tax Authority (DGI) provide this tax scale: the FAQ and the instructions for the annual tax return. Neither is dated. The scale may have been modified by laws enacted after 2013.

The timing is unclear: the FAQ indicates a return must be filed within the first 90 days following the end of the tax period, which runs from January 1st to December 31st, while the DGI (General Directorate of Taxes) guide mentions the settlement and return no later than 45 days after the end of this period. We are not making a definitive judgment on these two points; they should be verified with the DGI.

A net income of 420,000 C$: numerical example (fictitious profile)

Situation. Camille, a fictitious profile, is a Nicaraguan tax resident. Her net annual income from work is 420,000 C$ (assumed amount).

Issue. She wants to estimate the annual tax according to the scale in article 23.

Strategy. She identifies her bracket, from 350,000.01 to 500,000 C$, then adds the basic tax of 45,000 C$ to 25,% of the fraction above 350,000 C$.

Result. The portion exceeding 350,000 C$ is 70,000 C$; at 25 %, it amounts to 17,500 C$. The total tax is 62,500 C$, representing an average rate of 14.9 %. This calculation ignores deductions, social security contributions, and withholdings already made by the employer, which are not considered here.

Capital income and non-residents: diverging sources

For capital income, the DGI guide ("Aprendamos a tributar") indicates 15 % for residents and non-residents, and 30 % for transactions with territories designated as "tax havens" in the text. A DGI notice dated January 5, 2024, lists, for withholdings on dividends and interest, 15 % for both residents and non-residents, and 15 % on capital gains from securities. The DGI's FAQ on capital gains, however, mentions rates of 10 % for certain categories of investment income. We cannot definitively rule on this: the applicable rate depends on the income category and the applicable legislation.

Sources also differ regarding the employment income of non-residents. Article 24 of Law 891 (2014) stipulates a final withholding tax of 15 %. The DGI (General Directorate of Taxes) notice of January 2024 (code 35) indicates 20 % for the remuneration of non-resident employment income, and the DGI guide also mentions 20 % in its section on employment income. We are not taking a definitive stance on this point either.

Contributions to the INSS

The National Social Security Institute (INSS) page on affiliation schemes gives, for the comprehensive scheme, an employee contribution of 7.0 % and an employer contribution of 21.5 % in companies with fewer than 50 employees and 22.50 % in those with more than 50. The page is undated. It specifies that the comprehensive scheme covers short-, medium-, and long-term benefits. An INSS page on disability, old-age, and death insurance indicates that an old-age pension requires 60 years and 750 weeks of contributions. The page does not specify whether a foreign national is covered.

Nicaragua and the French lists

Nicaragua is not among the 11 states and territories on the French list of non-cooperative states and territories, according to the annex to the 2027 draft budget. However, it is included among the geographical sanctions regimes listed by the French Treasury (DG Trésor). Its page dedicated to Nicaragua, published on March 19, 2026, mentions an asset freeze under Regulation (EU) 2019/1716 of October 14, 2019, and refers to the national register of asset freezes to identify the individuals concerned. We draw no legal conclusions from this: for a specific transaction, please consult the DG Trésor website and the register. The absence of a tax treaty between France and Nicaragua is addressed on our dedicated page.

What this page does not cover

This section does not cover wealth tax, inheritance tax, local savings, withholding taxes on royalties, or visas and residency permits: these matters are not addressed here and should be verified with the Nicaraguan authorities. Local tax regulations should be confirmed with a professional based in Nicaragua. Matters pertaining to France, including the departure declaration, exit tax, and declared bank accounts, are covered in our section on tax residency.

What changes depending on your situation

• The number of days spent in Nicaragua during the calendar year.
• The location of your center of economic interest, and your tax residence certificate elsewhere.
• The nature of your income: salary, activity, dividends, interest, gains.
• Your status as a resident or non-resident at the time of each deduction.
• Your situation with regard to France, as long as you are domiciled there.

The rule depends on your situation. No results are guaranteed.