Bolivia's Tax System and Regulatory Framework in 2025

The foundation of Bolivia’s tax structure is rooted in the Tax Reform Law (Law No. 843) enacted on May 28, 1986, which outlines the taxation mechanisms applicable to all economic activities conducted within the country. Subsequent amendments, particularly through Law No. 1606 issued on December 22, 1994, along with sector-specific regulations, have refined this framework over time.

For official tax information and services, taxpayers can access Bolivia’s National Tax Service portal at www.impuestos.gob.bo.

Key Taxes and Applicable Rates in Bolivia

Value Added Tax (VAT – IVA)

VAT applies to individuals and legal entities engaged in the sale of movable goods, leasing of movable and immovable property, provision of services, and permanent imports. Exemptions include exports, diplomatic missions, and imports valued under USD 1,000. The standard VAT rate is 13% of gross sales or service revenue.

Additional VAT (RC-IVA)

This supplementary tax operates under two main categories:

1. Employment-based taxation: Applies to salaries, bonuses, overtime, and additional compensation for public and private sector employees. Retirees, thirteenth-month payments, welfare benefits, and pensions are excluded. The tax is calculated at 13% of taxable income after allowable deductions.
2. Receipt-based taxation: Levied at 13% on rental income, interest from bank deposits (fixed or current accounts with terms under three years), remuneration for company directors, local staff employed by international or diplomatic organizations, and certain public-sector earnings.

Corporate Income Tax

Bolivia follows a territorial taxation model for corporate earnings:

1. Corporations: Subject to a flat 25% tax on net profits. Exemptions apply to government bodies, public universities, and non-profit institutions.
2. Self-employed professionals: Includes lawyers, brokers, notaries, and intermediaries. They must pay 25% tax on 50% of their net income after deducting VAT paid during the fiscal year.
3. Foreign beneficiaries: Applies to profits repatriated abroad by individuals or legal entities earning income in Bolivia, as well as branch operations conducting partial business locally. The withholding tax rate is 12.5% on remitted profits and between 1.5% and 4.0% on income from partial operations.

Transaction Tax

A 3% levy on gross transaction revenue from commercial, industrial, service, construction, labor provision, and transfers of movable or immovable assets. This tax affects all individuals and legal entities involved in such transactions regardless of profitability.

Municipal Tax on Transfer of Real Estate and Vehicles

A 3% tax is imposed on the transfer of real estate and used vehicles (second-hand or later transfers), excluding new vehicle sales by dealerships.

Property and Vehicle Ownership Tax

Levied annually on owners of real estate and motor vehicles. Exemptions extend to war veterans and their surviving spouses, central government agencies, non-profits, diplomatic missions, and small rural landholders. Rates vary based on asset type and assessed value.

Special Consumption Tax

Imposed on domestically sold or imported goods intended for final consumption, including tobacco products, automobiles, alcoholic beverages (beer, wine, spirits, chicha), and soft drinks. Manufacturers, importers, and wholesalers are liable; retailers are exempt. Rates differ—specific ad valorem or fixed rates apply depending on product category.

Special Tax on Oil, Gas, and Derivatives

Applied to the import, sale, and distribution of petroleum, natural gas, and related products. Rates are set per unit and adjusted annually based on the exchange rate between the US dollar and the Bolivian boliviano.

Tax on Gratuitous Transfer of Assets

Imposed on inheritances and donations. Exempt entities include national and municipal governments, non-profit organizations, and war heroes. Tax rates vary by relationship: 1% for spouses, parents, and children; 10% for siblings and direct descendants; 20% for extended relatives and non-family beneficiaries.

Exit Tax

Charged on passengers departing Bolivia by air. Mandatory for Bolivian residents and foreign nationals residing in the country. Exemptions cover infants under two years, diplomatic passport holders, and recognized war veterans.

Mining Surcharge Tax

Under the revised Mining Code, mining companies no longer pay corporate income tax but instead contribute a Mining Surcharge Tax. It applies to exploration, extraction, processing, refining, and sales of minerals and metals. Processing activities and temporary imports are excluded. Rates are determined periodically by the Ministry of Mining and based on gross sales revenue.

Direct Hydrocarbon Tax (IDH)

Established under the Hydrocarbons Law of May 17, 2005, this tax is levied directly on oil and gas producers, forming a critical revenue stream for regional development and social programs.

Foreign Exchange Transaction Tax (ITF)

A 0.25% tax (2.5‰) on all foreign currency banking transactions exceeding USD 1,000. Designed to monitor capital flows and generate revenue from cross-border financial activity.

Digital Services Tax

In April 2021, President Luis Arce proposed a bill to impose a 13% VAT on foreign digital service providers operating in Bolivia. Despite its intent to level the playing field for local businesses, the proposal faced strong opposition from tech firms and civil society and remains suspended as of 2025.

Carbon Emissions Tax

As of 2025, Bolivia has not implemented a carbon tax or emissions trading system. Environmental policy remains focused on conservation and sustainable development rather than market-based climate instruments.

Special Economic Zones and Regional Incentives

Economic Zone Regulations

Bolivia does not currently operate any nationally recognized special economic zones (SEZs) or free trade zones. While some local jurisdictions have attempted to establish regional incentive areas, these lack comprehensive regulatory frameworks and robust infrastructure, limiting their economic impact.

Overview of Regional Development Initiatives

The absence of formal SEZs means that nationwide tax incentives tied to export processing or offshore operations are not available. However, certain departments are advancing alternative models to attract investment.

Notable Regional Policies: Public-Private Partnerships in Santa Cruz

On August 5, 2021, the Department of Santa Cruz enacted a regional PPP law aimed at stimulating infrastructure projects, boosting economic growth, and generating employment. Governor Luis Fernando Camacho emphasized that the legislation provides a secure legal environment for both domestic and foreign investors. The law caps public funding at 20% of total project costs, ensuring private sector leadership. Projections suggest up to USD 1 billion in investments could be mobilized by 2025 through this framework.

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