background image
3.1. Corporate Tax Residence

Bolivia has no definition of residence for tax purposes because its system is purely based on a territorial approach. In practical terms, a company is deemed to be resident for corporate and withholding tax purposes if it is incorporated under Bolivian law, or if it has its place of effective management in Bolivia. Nevertheless, corporate residence has little bearing on taxation. Indeed, the Bolivian income tax (IUE) is based on whether the businesses are carried out within or outside Bolivia. If the business is carried on within Bolivia, then tax is due regardless of whether it is carried out by a resident or non-resident. The only difference is that if the non- resident does not have a business establishment or other taxable presence in Bolivia, then income sourced in Bolivia will be subject to withholding tax rather than to corporate income tax.