Tax Reporting

Tax Obligations for Rental Income in El Salvador

If you earn money renting your vehicle on Sicarro, you may have tax obligations in El Salvador. This guide provides general information about tax considerations for rental income. It is important to understand your responsibilities and keep proper records.

IVA (VAT) Considerations

El Salvador's Impuesto a la Transferencia de Bienes Muebles y a la Prestacion de Servicios (IVA) is the value-added tax:

• The standard IVA rate in El Salvador is 13%
• Vehicle rental services may be subject to IVA if you are a registered taxpayer
• Formal businesses with NRC registration are required to charge and remit IVA
• Informal individual suppliers may have different obligations depending on their total annual income
• IVA returns are typically filed monthly to the Ministerio de Hacienda

Income Reporting Requirements

All income earned through Sicarro should be considered when filing your annual tax return:

• Impuesto sobre la Renta (ISR): Income tax applies to rental earnings
• Individual tax rates in El Salvador range from 0% to 30% depending on total annual income
• Rental income is added to your other sources of income for tax calculation
• The annual tax filing deadline is typically April 30 for the previous calendar year
• Keep all records of income and expenses for at least 5 years

Generating Earning Reports from Your Dashboard

Sicarro makes it easy to export your financial data for tax purposes:

1. Go to Dashboard > Earnings
2. Click "Export Report"
3. Select the date range (e.g., January 1 - December 31 for annual filing)
4. Choose export format: CSV or PDF
5. The report includes:
   • Each completed booking with dates, vehicle, and gross amount
   • Service fee deducted per booking
   • Net earnings per booking
   • Payout date and method for each booking
   • Total gross earnings, total fees, and total net earnings for the period
6. Share this report with your accountant for tax filing

Keeping Records of All Rentals

Good record-keeping is essential for accurate tax reporting and potential audits:

• Income records: All booking confirmations, payout receipts, and earning reports from Sicarro
• Expense receipts: Keep receipts for all deductible expenses (fuel, maintenance, insurance, cleaning supplies, etc.)
• Mileage logs: Track personal vs. rental use of the vehicle if applicable
• Insurance payments: Receipts for insurance premiums
• Maintenance invoices: Mechanic bills, oil changes, tire replacements
• Depreciation records: Purchase price and date of the vehicle for depreciation calculations
• Bank statements: Showing payout deposits from Sicarro

Business Registration (NRC, NIT)

Depending on your rental volume, you may need formal business registration:

NIT (Numero de Identificacion Tributaria)

• Every taxpayer in El Salvador has a NIT
• If you do not have one, you can obtain it from the Ministerio de Hacienda
• Required for filing any tax returns

NRC (Numero de Registro de Contribuyente)

• Required if you are formally registered as a taxpayer for IVA purposes
• Businesses and individuals exceeding certain income thresholds must register
• Registration is done at the Ministerio de Hacienda
• Once registered, you must issue facturas (invoices) and file monthly IVA returns

Informal vs. Formal Supplier Tax Obligations

Informal Suppliers (Individual, Low Volume)

• If your total annual income from all sources (including rental) is below the tax threshold, you may not owe income tax
• You are still recommended to declare your income
• Keep records in case you cross the threshold in the future
• Consider formalizing if your rental income grows significantly

Formal Suppliers (Business, High Volume)

• Must have NIT and NRC
• Required to issue facturas for each rental (Sicarro can provide the data)
• Must file monthly IVA returns (F-07 form)
• Must file annual income tax return (F-11 form)
• May be required to make monthly advance income tax payments (pago a cuenta)
• Must keep formal accounting books (libro de IVA compras, libro de IVA ventas)

Bitcoin/Lightning Income Reporting

If you receive payouts via Bitcoin Lightning:

• Bitcoin is legal tender in El Salvador under the Bitcoin Law (Ley Bitcoin)
• Income received in Bitcoin should be reported at the USD equivalent value at the time of receipt
• Sicarro records all Lightning payouts in USD equivalent for your convenience
• If you hold Bitcoin and it appreciates in value, capital gains may apply when you convert to USD
• The treatment of Bitcoin for tax purposes is still evolving - consult with your accountant
• Keep records of all Lightning transactions, including dates and USD equivalent amounts

Consulting a Local Accountant

We strongly recommend working with a qualified Salvadoran accountant, especially if:

• Your annual rental income exceeds $5,000
• You have multiple vehicles generating income
• You are unsure about your IVA or income tax obligations
• You want to maximize deductions and minimize your tax burden legally
• You receive Bitcoin Lightning payouts and need guidance on reporting
• You are transitioning from informal to formal supplier status

A good accountant can help you structure your rental business efficiently and ensure full compliance with Salvadoran tax law.

Potentially Deductible Business Expenses

If you are formally registered, the following rental-related expenses may be deductible:

• Vehicle insurance premiums
• Maintenance and repair costs
• Cleaning supplies and professional detailing
• Vehicle depreciation
• Fuel costs related to delivery/pickup for renters
• Parking fees for airport handovers
• Phone and internet costs (proportional to business use)
• Sicarro platform fees (the service fee is a business expense)

Tax Calendar and Deadlines

Filing	Frequency	Deadline
IVA return (F-07)	Monthly	Within 10 business days of following month
Advance income tax (Pago a Cuenta)	Monthly	Within 10 business days of following month
Annual income tax (F-11)	Annual	April 30