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Bolivia’s Tax System – Country Profile

Welcome to our blog post delving into the intricacies of Bolivia’s tax system. In this article, we will provide a comprehensive overview of the tax framework in Bolivia, examining its key features, regulations, and implications for both individuals and businesses. Whether you are a curious reader seeking to expand your knowledge or a potential investor exploring the tax landscape, this country profile will offer valuable insights into Bolivia’s tax system. So, let’s delve into the intricacies of Bolivia’s tax regulations and discover how they shape the country’s economic landscape.

Bolivia’s Tax System Overview

Corporate Income Tax: 25%
Personal Income Tax: 13%, progr.
Inheritance Tax: 1-10-20%
Gift Tax: 1-10-20%
Wealth Tax: 1.4%-2.4%

Territorial Tax Regime

Bolivia has a territorial tax regime. Income tax is levied on Bolivian source income only. Income from foreign sources, including investment income earned abroad, is not subject to tax.

Corporate Income Tax

Corporations are subject to tax on Bolivian source income at a standard rate of 25%. Higher rates apply to mining, banking and insurance. Capitals gains are taxed at the corporate rate.

Personal Income Taxation

Residents of Bolivia are subject to income tax on local source income at 13%. Capital gains are not subject to tax. Bolivia imposes gift and inheritance tax, at rates of 1%, 10%, or 20% depending on the recipient’s relationship to the deceased or donor. In addition, Bolivia imposes wealth tax on fortunes greater than BOB 30MM (approx. 4.3MM), at rates between 1.4% and 2.4%, including foreign assets.

Anti-Avoidance Rules

Bolivia has no General Anti-Avoidance Rules (GAARs). Bolivia has Transfer Pricing rules, which follow OECD guidelines and require arm’s length prices between related parties. Transfer pricing rules apply to transactions between Bolivian residents and residents of low-tax and tax-haven jurisdictions. Bolivia has Thin Capitalization rules, but does not have Controlled Foreign Corporation (CFC) rules.

Foreign Investment Protection

Bolivia has international investment agreements with a number of jurisdictions for the protection of investments that provide for international arbitration in the event of nationalization or expropriation, including with China, Cuba, Paraguay, Peru, Romania and Korea. Bolivia unilaterally terminated its agreements with Luxembourg, the Netherlands, Spain, Switzerland, the United Kingdom and the United States. Bolivia withdrew from ICSID in 2007.

Double Tax Treaties (DTTs)

Bolivia has a number of DTTs, including with Argentina, Colombia, Ecuador, France, Germany, Peru, Spain, Sweden, and the United Kingdom.

Tax Info. Exchange Agreements (TIEAs)

Bolivia has no Tax Information Exchange Agreements (TIEAs) in force.

OECD Multilateral Convention

Bolivia is not a signatory to the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Signatories to the Convention are required to exchange information on request.

Common Reporting Standard (CRS)

Bolivia has not adopted CRS for the automatic exchange of account information. 

FATCA

Bolivia does not have a FATCA Intergovernmental Agreement (IGA) with the United States for the automatic exchange of account information, and is not treated as having an agreement in substance.

In conclusion, Brazil’s tax system adopts a territorial approach, focusing primarily on income originating within its borders and generally excluding income from abroad. This system imposes distinct taxes on corporate earnings, individual income, wealth, and inheritances. It’s important to highlight the lack of anti-avoidance legislation in Brazil’s tax regime. However, Brazil actively participates in international tax cooperation efforts, being a signatory to the OECD Convention and the Common Reporting Standard (CRS). The country has also established a number of international tax treaties and agreements aimed at protecting investments. These initiatives demonstrate Brazil’s commitment to aligning with global tax norms and preventing tax evasion. For those interested in delving deeper and gaining a more detailed understanding of Brazil’s unique tax landscape, we encourage downloading an in-depth resource or guide that offers comprehensive insights.

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Bolivia's tax system

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