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5.1. Tax Base for Resident Entities

From 1 January 2017, resident companies are taxed on territoriality basis i.e. taxed on income derived from sources within Honduras.

Capital gains tax is applicable on sale or transfer of assets or rights in assets not in the ordinary course of business and are lower than corporate tax (‘CIT’) rate. Capital gains derived from sale of assets in the ordinary course of business are subject to tax as ordinary income at CIT rate.

Capital losses are deductible business expenses, if it is incurred in the ordinary course of business.

Dividend income received by resident companies is subject to tax at lower rate than CIT. From year 2015, double taxation on dividends have been abolished whereby, if tax is withheld on distribution of profits or dividends, then the same is not subject to tax on re-distribution.

Stock dividends are not taxable.