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3.2. Practical Aspects of Tax Residence

Since Bolivia applies a limited territorial system, only profits made by companies (regardless of their nationality and the place where the contract is concluded) operating in Bolivia are liable to corporate income tax (IUE) in Bolivia.

This means that Bolivian "enterprises" are not subject to tax in Bolivia on business profits nor passive income realized abroad. Likewise, a foreign company is liable to Bolivian corporate income tax only on the profits realized by enterprises operating in Bolivia.

Withholding tax (12.5%) for payments to foreign companies is applied only when specified services are provided from abroad or in the foreign country (technical assistance, advice, expertise, professional services).

The expression "enterprises" refers to a company, permanent establishment, branch, individual enterprise and professionals.