Our purpose Make an impact that matters

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1 How to do business in Honduras? Investor's guide 2018

2 Our purpose Make an impact that matters Our aspiration To be indisputed global leader in professional services 02

3 Table of contents Country profile 4 Legal framework 7 Tax system 10 Income tax, net asset and solidarity contribution 12 Tax withholding 14 Sales Tax 16 Employers contributions 17 Municipal rates and taxes 18 Other provisions 20 Special regime 22 Other laws with tax incentives 22 Tax administration office 23 03

4 Country profile Location and Capital City Its official name is the Republic of Honduras, located in Central America and its capital is the Central District constituted jointly by the cities of Tegucigalpa and Comayagüela. Limited to the north and east by the Caribbean Sea, it borders the Republic of Nicaragua to the southeast, the Gulf of Fonseca and the Republic of El Salvador to the south, and the Republic of Guatemala to the west. Region Latin America and the Caribbean Income Category Low-medium Income Population 8,866,351 (INE 2017) Gross Income per cápita (US$) 2,730 (BCH 2017) Territorial extension 112,492 km 2 Language The official language of Honduras is spanish. Honduras is a multi-ethnic, multicultural and multilingual country that consists of four large ethnic families: mestizos or whites who are the majority, the indigenous (lencas, misquitos, tolupanes, chortis, pech o payas, tawahkas), the garífunas and the criollo-anglospeaking. The indigenous and Garífuna ethnic groups constitute the cultural heritage of Honduras and represent about 7% of the country's population. Weather Honduras is located in a tropical position of 15 to 16 degrees north of the equator, it only has two stations, which are well defined: The dry season and the rainy season. The rainy season begins in May, extending until July with a break during the month of August, which generally resumes in September until the month of November when the dry season begins. This station extends until the month of April or May. 04

5 Ports and Airports The most important ports are: Puerto Cortés, Puerto Castilla, La Ceiba, Roatán and Tela, which are located in the North of the Country with access to the Atlantic Ocean and in the South with access to the Pacific Ocean only the Port Bocas del Henecan or San Lorenzo. Puerto Cortés, is the most important in the country and together with Puerto Castilla and San Lorenzo, they handle almost all of Honduras' maritime trade. Currently, the country has four international airports: Ramón Villeda Morales (SPS) in San Pedro Sula. Aeropuerto Internacional Toncontín (TGU) in Comayagüela. Aeropuerto Goloson (LCE) in La Ceiba. Aeropuerto Juan Manuel Gálvez (RTB) in Roatán. Type of Government The form of government is republican, democratic and representative. It is exercised by three powers: Legislative, Executive and Judicial, complementary and independent and without relations of subordination. Political Structure Honduras is divided into 18 departments similar to the states or provinces, which in turn are subdivided into 298 Municipalities. Political Parties Partido Nacional de Honduras. Partido Liberal de Honduras. Partido Innovación y Unidad-Social Demócrata. Partido Demócrata Cristiano de Honduras. Partido Unificación Democrática. Partido Anti Corrupción. Partido Libertad y Refundación. Natural Resources Precious woods, fish, hydroelectric energy, coffee, bananas, sugarcane, and non-traditional products. 05

6 Economic Information Currency and Exchange Rate The local currency is Lempira and the exchange rate (which is not fixed) is approximately HNL for US $ 1.00 (January 2018 BCH). Principal economic activities Agriculture, manufacturing, commerce, social, personal and community services, construction and financial services. Honduras is one of the main producers of Banana, Coffee and African Palm in the region. Its main economic sector is that of agriculture, followed by mining and the maquila industry. Currently, the government of Honduras carries out projects to promote and expand the industrial sector, diversify agriculture, improve transportation and develop hydroelectric projects. Additionally, Honduras has Free Trade Agreements with: Dominican Republic, El Salvador, Guatemala, Panama, United States of America, Chile, Colombia and Taiwan. In addition, it is a member of the Central American Common Market and the World Trade Organization. Industries The main industries of Honduras are: agricultural, mining, manufacturing, electrical, forestry, tourism and financial. Agriculture - products Sugar cane, corn, plantains, coffee, beans, cattle, and others. Economic Summary The Gross Domestic Product (GDP) depends on: Financial Intermediation; Communications; and Commerce, Hotels and Restaurants; added to the tax collection., Agriculture, Livestock, Hunting, Forestry and Fishing, Manufacturing, Construction, Transportation and Storage (BCH December 2017). Inflation Rate 4.73% (December 2017 BCH). 06

7 Legal framework Company incorporation Any entity that carries out commercial operations in Honduras is obliged to carry out the necessary procedures before starting its commercial activity, and once the entity is legally registered in Honduras, the corresponding inscriptions and registrations established by the different dependencies that require registration or inscriptions are made. The current Commercial Code establishes the different modalities of incorporation of a commercial entity in Honduras, the types of companies that are generally constituted in Honduras are the Limited Liability Company and the Corporation. The Limited Liability Company has at least two partners and a maximum of twenty-five, with a minimum share capital of HNL 5, (Approx USD 211); The Corporation has at least two partners and a minimum share capital of HNL 25, (approximately USD 1,055). The partners must appear before a Notary Public to authorize the Incorporation Deed, which must be registered before the Public Registry of Commerce of the domicile of the company. Obtainment of the incorporation deed The Incorporation Deed is a public and legal instrument that contains the names of the people that make up the company, the name or corporate name, explaining the type of company, initial capital, duration, nature and its purpose. Person who performs the work: Lawyer with Power of Attorney. Average time: Twenty (20) working days. From L. 3, (USD 127) to L. 5, (USD 211), depending on the type of commercial company to be incorporated. In addition, the fees of the attorney with POW. Value: From L. 3, (USD 127) to L. 5, (USD 211), depending on the type of commercial company to be incorporated. In addition, the fees of the Attorney with POA. Formalities to be completed Deliver the following data to the Attorney with POA: Name or business name of the company. Describe the activity to which it will dedicate. Domicile of the company. Minimum initial capital. Photocopy of personal documents of the partners or shareholder. The rights that must be paid for the incorporation of a company will be 1.5% per thousand, on the social value, stamps of the Bar Association, publication before a newspaper of greater circulation. One of the requirements that a commercial entity must comply with is the registration in the Chamber of Commerce of the fiscal domicile. 07

8 Registration in the Commerce Registry Office Delegate of the Chamber of Commerce and Industry (CCI) as of January According to Article 384 of the Commercial Code, registration of any merchant in the CCI corresponding to the municipality in which the new company will operate is mandatory since, without this registry, the Municipal Mayors will not authorize the operation permits. Person who performs the work: Legal Representative or Attorney with POW. Average time: One (1) Working day. Formalities to be completed Present at the Helpdesk window: Original Incorporation deed and copy. Payment receipt of the original CCI form and copy. Copy of the Incorporation deed publication in Official Gazette. Copy of bank deposit in concept of the company s capital. Operation Permit Is the document issued by the Municipal Authority of the company s jurisdiction, which insures they are complying with all of the Municipal regulations. Person completing the procedure: The Company s legal representative or attorney in fact. Estimate time of completion: The time might vary depending on the Municipality, however it usually takes around four (4) days in those Municipal Offices that have simplified procedures and up to thirty (30) days in those that don t (such as Tegucigalpa M.D.C.). Costs: The operating costs for the Municipality of Tegucigalpa M.D.C. are charged according to the following: a) Amount declared or projected within the volume of sales declarations for the period; b) Economic activity The Local Taxation Plan of every Municipality sets forth for all natural persons or legal corporations, a payment based on their declared income. Furthermore, for each field inspection, technical opinions, proofs and authorizations, there will be a charge of HNL (Article 70, Municipal Local Taxation Plan). 08

9 Formalities to be completed: The process differs according to the specific municipality in which the permit or license is requested. In Tegucigalpa and Comayagüela s particular case is the following: The company s legal representative or its attorney in fact, must go the Central District Municipality s (Tegucigalpa M.D.C.) Information helpdesk of the Operating Permit Department located adjacent to Clínicas Viera, and ask for all the needed requirements according to the company s commercial activity and lodge the request attaching the following: Copy if the company s Deed of Incorporation Copy if the Tax Id Registration Number (R.T.N.) Copy of the Legal Representative s ID Copy of a valid municipality solvent letter for the Legal Representative. Registration in the Chamber of Commerce and Industry of Tegucigalpa Lease for the establishment(s), with its corresponding municipal cadastral number Sale Declaration for the period January to December operations. Proof of payment of the immovable property tax of the establishment where the operations will be held., in case of leasing the establishment, copy of the lease contract. To understand about the process of approval of the operating license done by the Municipal Authorities inland, every company shall approach each one of them individually, given the process varies according to each. Special permits According to the company s commercial activity, they shall request special permits and licenses such as: 1. Environmental License. 2. Trademarks and patents registration. 3. Health Department permits and licenses. 4. Bar Codes, 5. Registration in the Chamber of Industry and Commerce. 6. Exclusive distribution and Representation permits. 7. Export permits, and 8. Permit to import products of animal and plant origin. Person completing the procedure: Designated Attorney with POW. 09

10 Tax System The tax system of Honduras operates under the principle of territorial income as of January 1, The tax doctrine establishes two types of fiscal obligations a) formal fiscal obligation and b) material fiscal obligation. The formal tax obligation has as its objective the presentation of those documents that validate the tax act such as the presentation of declarations, reports, etc., and the material tax obligation is nothing other than the payment of tax returns by taxpayers that under the tax law are required to submit. The first fiscal obligation that every legal entity that performs acts of commerce, is the obtainment of the National Tax Registry (RTN). The RTN, is the mechanism used to identify, locate and classify individuals or legal entities, of obligations administered and controlled by the Tax Administration (SAR). Requirements to obtain the RTN of a mercantile company: Submit Form SAR-410 and Annex SAR-410B "Affidavit of Inscription, Start of Activities and Update to the National Tax Registry". Copy of the Deed of Constitutions registered in the Mercantile Registry (Present Original to collate). Original and Copy of a public receipt certifying the place of residence or fiscal domicile. Photocopy of the RTN of the legal representative. Copy of the identity of the Legal Representative and partners if they are Hondurans; If they are foreigners, a copy of the passport or tax identifier of their country. Said request must be presented by the Legal Representative, otherwise an attorney can carry out the process by presenting a copy of the identity and an authenticated power of attorney. 10

11 Other of the formal tax obligations we have the following: Presentation of the Income Tax Declaration. Sales Tax Declaration. Declaration on Capital Gains. Declaration of Start of Activities within 60 days at the start of your activities. Declaration of Withholdings (article 5, 22 and 50). Declaration of participation of Utilities and Partners. Suppliers Declaration. Rent Declaration. Notification of change of activities, legal representative, fiscal domicile. Declaration of Close of business and Activities. Customs Declarations as the case may be. The Income Administration Service (SAR) in its page contains the tributary calendar, which establishes the days in which the fiscal obligations must be fulfilled. Accounting books authorization According to the Commercial Code, the employer will be obliged to keep an account and reason of all its operations and must keep a properly organized commercial accounting, based on the double entry system. For this, it must carry: A Book of Inventories and Balances, A Daily Book and a General Ledger, and Others that are necessary for objective requirements or special laws. The compulsory books must be pasted and foliated and will be authorized by the Municipal Mayor of the place where the company is located. The number of pages that the book has will be stated and in each one of them the seal of the corresponding organism will be stamped. Person completing the procedure: Company s Legal Representative or the Designated Attorney with POW. 11

12 Income tax, net asset and solidarity contribution Income Tax ISR taxes any income from capital, labor, or a combination of both, within the territorial income principle. For Income Tax purposes, any kind of operational performance, earnings, profits, revenue, interests, products, benefits, participation, salary, wage, fee or any other cash or in kind income that modifies the taxpayer s patrimony will be considered as an income. The rate for legal persons is 25% which is calculated on the taxable base; The taxable income results by deducting the allowed deductions by law from the gross income. This tax is to be paid in three (3) quarterly equal payments due on June 30th, September 30th and December 31st; the last payment is done along with the Income Tax declaration on April 30th of each year. Minimum Tax According to Decree for the Control of Exonerations and Anti Evasion measures, article 22-A was added to the Income Tax Law stating that all Individuals or entities domiciled in Honduras shall pay 1.5% over the total gross income greater or equal to Ten Million Lempira s (L.10,000.00) over the tax period, only when the result of the application of the rates of Articles 22, a) & b) result lower than the 1.5% of the gross income declared. If a company s income is lower than Ten Million Lempira s (L.10,000.00), they shall comply with the declaration and payment of the rates subject to Article 22, a) and b) of the Income Tax Law and those of the Net Asset Tax Law in forced by the Tax Equity Law, Decree (April 3rd, 2003). 12

13 Anti-evasion Measures Act The individuals or entities who, during the non-prescribed fiscal periods, in two (2) of them have had consecutive or alternate operation losses and who in the last period had gross income equal to or greater than one hundred million lempiras (L100,000, Approximately USD 4,219,410) per year, will be subject to the payment of an advance payment of one percent (1%) as income tax, which will be calculated on gross income.the advance payment of one percent (1%) as income tax, constitutes a credit in the Annual Declaration to be applied either in the income tax, net assets or solidarity contribution. Net Asset Tax This is a scheduler tax that applies to the total net asset for corporations or entities domiciled in Honduras, created by decree (published in the official Gazette on April 10, 2003). Solidarity Contribution Tax Moving forward the tax period 2014 and in compliance with Chapter V regarding Legal Persons, of the Decree , with the exception of Special Regimes of Exportation and Tourism and regardless of the dispositions of Article 22nd of the Income Tax Law, all companies shall pay a Five Percent (5%) of Solidarity Contribution Tax that will be calculated over the surplus of the net taxable income above One Million Lempira s (L.1,000,000.00). The Solidarity Contribution Tax represents a surcharge of the Income Tax; therefore, it will not be deductible of such tax and will be subject to Anticipated Payment Regime (Regimen de Pagos a Cuenta), annual declaration and any other applicable disposition of the Income Tax Law. The taxable base will be the resulting difference of the assets reflected in the taxpayer s General Balance minus the doubtful accounts provisions, the accumulated depreciations permitted by the Income Tax Law, revaluation of fixed assets, as long as such are not disposed and the values from registered investment expansions, such as projects or fixed assets in process, are not in operation. The balance from financial obligations directly related to operational fixed assets financing will also be deductible. The One Percent (1%) rate applies over the total net value over Three Million Lempira s (L.3,000, Approx. USD 126,582). 13

14 Tax withholding 1% Income Tax Withholding, Executive Decree All taxpayers with an income above L.15, (Approx. USD $ 623,911) will be subject to Income Tax withholdings, being obliged to withhold and pay a 1% Income Tax to all natural and legal persons that are not subject to Anticipated Income Tax Regime ( Pagos a Cuenta ), over all the sales of goods and services rendered by them. The taxable base shall be all the gross sales minus the devolutions and services determined by the Tax Administration. Sales Tax withholdings, Executive Decree All those tax payers previously categorized as Large Tax Payers shall withhold and pay the Sales Tax over any sale of goods or services provided under the following categories: a) Freight services of any kind. b) Cleaning services and fumigation. c) Printing and silk-printing services. d) Research and security services. e) Leasing of real estate for commercial purposes, plant and equipment. The withholding shall be applied at the moment the invoice or equivalent document is issued, at the moment the services have been rendered or at the moment a payment or deposit is done; whichever happens first. Article 50th Withholding Professional Fees Taxes all incomes from professional fees, allowances, commissions, remunerations, bonuses, and payment for any technical services, paid to any individual or entities, resident in Honduras. The ongoing rate for this tax will be 12.5% over the concepts previously mentioned, however this shall not apply to persons or companies subject to Anticipated Income Tax Regime ( Pagos a Cuenta ). Article 22nd Withholding - Employment tax Taxes all individuals or employee s income (payroll tax). Such withholding will apply to all persons with income above L. 152, (Approx. USD 6,437). and the ongoing rate goes from 15% up to 25%. A L.40, (Approx. USD $ 1,688) medical allowance is considered as deductible, without having to present proof of them. 14

15 The following progressive rate table will be used to calculate income tax to employees: From L To L.152, Exempt From L. 152, To L. 232, % From L. 232, To L. 540, % From L. 540, Onwards 25% Article 5th, Non Resident withholding Decree published in the Official Gazette on December 4, 2012, this decree is applied as of 2012, gross income obtained from Honduran source by non-resident or non-domiciled individuals and entitites must pay the tax in conformity to the percentages detailed below: No. Category % 1 Income derived from movable or immovable property, except those included in paragraphs 5 and 7 of this article. 25% 2 Royalties from mining operations. 25% 3 Wages, salaries, commissions or any other compensation from services either inside the national territory or outside of it. 4 Income or profit obtained by foreign companies through Branches, Subsidiaries, agencies, legal representatives and others that operate in the country. 5 Income, profits, dividends, profit sharing or reserves by any individual or entity. 6 Royalties and other sums paid for the use of patents, design, procedures and secret formulas, trademarks and copyrights, except those set forth in numeral Interest on commercial operations, bonds, securities or other obligations. 8 Income derived from aircrafts, ships or vehicles operations. 9 Operating income of communications companies, use of software, IT solutions, telematics and others in the telecommunications area. 10 Insurance premiums and any other income from bank guarantee or policy s 25% 10% 10% 25% 10% 10% 10% 10% 11 Income derived from public shows. 25% 12 Films and video-tape for cinemas, television, video clubs and rights for cable television. 25% 13 Any other income not mentioned herein 10% 15

16 Sales Tax (VAT) The general tax rate is fifteen percent (15%) on the value of the tax base of imports or the sale of goods and services subject to it. Additionally, 18% applies in the case of beer, carbonated beverages and soft drinks, the tax is applied on the sales price at the distributor stage, including the tax value of production and consumption in the import stage and National Production level. During the sale of goods or services the tax base will be the value of the good or service, whether it is a cash payment or credit; excluding direct expenses for ordinary or extraordinary financing. The taxable base for imported goods will be their CIF value, added to the custom duties, excise duties, specific taxes and any other rates levied on importations. For all goods for personal use or consumption, as well as selfservices and gifts, the taxable base will be the commercial value of the good or service. For importation purposes the payment will be done at the moment of the nationalization of the goods or settlement of the corresponding duties. For the local producers the payment will be done over the first ten (10) calendar days of the following month in which the sales were made. 16

17 How to do business in Honduras? Investor's guide 2018 Employers contributions Private contribution regime The Private Contribution Regime (RAP), is considered one of best benefits of the private industry, and it was originally created to support an unattended segment toward savings and direct those savings into financing. The employer s contribution is 1.5% over the total salaries, and another 1.5% is paid by the employees through monthly payroll withholding paid to RAP. Honduran Social Security Office (IHSS) All natural or legal persons with an operational permit and legally incorporated, must be registered to the IHSS. All employers are obliged to register their employees, as well as to notify when they seize to work under their service, this obligation starts when the first employee is hired. Vocational Training Institute (INFOP) The purpose of this institute is to provide training and coaching for all workers in the different economic activities. Article 23rd of the INFOP Law establishes that all companies with more than five employees will pay an equivalent of 1% of all the perceived salaries and wages of the entire payroll. This obligation must be paid every thirty (30) days, with a 10 days grace period after which a 10% surcharge will apply. The employer will contribute on a monthly basis the equivalent to a 8.5% and the employee a 5% of their salary or wage, for the social security services. 17

18 Municipal rates and taxes Municipal Tax on Industry and Commerce This tax is to be paid by any natural person or trader, collectively or individually, based on its mercantile activity, industrial, mining, agricultural, public or private services, electronic communications, urban development, casinos, financial institutions, insurance and any other lucrative activities. At the beginning of operations of any business, a projected income declaration for the first quarter of operations must be filed; this shall be the base to calculate the monthly tax to be paid over the course of the first year. This declaration will be done at the memento of requesting the operating license. The tax will be paid according to the volume of production, income or annual sales according to the following progressive rate: From to Rate per thousand 0 500, , ,000, ,000, ,000, ,000, ,000, ,000, Onwards 0.15 At the beginning of the operations the tax is based on an estimated annual income. The actual tax paid over the year will be adjusted at the end of the tax period to reflect the real annual income. This tax and rates shall be applied in compliance with the municipal Taxation Plan. Declaration and payment All taxpayers subject to this tax shall file an Affidavit on the month of January stating their previous year income, for which the payment shall be done on the first ten (10) days of each month, except for January that will be paid at the most on February 10th. 18

19 Property on Real Estate The Property Tax on Real Estate is a levy on the real estate value within a Municipality regardless of the owner s domicile, and it will be paid at an ongoing tariff of L.3.50 for every thousand when it s an urban property and L.2.50 when it s rural property. Payment Period: The tax period starts on June 1st and can be paid on monthly basis, quarterly or annually. Personal Tax This tax is a tax that falls on the annual income that natural persons receive within each municipality, whether or not they have their domicile in the correspondent municipality. This tax is paid in favor of the municipalities administration office. Declaration and Payment The submission and payment of this tax will be done at the same moment and is calculated over the income of the previous year and shall be filed within the first three (3) months of the year. All natural persons shall pay the Local Income Tax over their total income earned in the Municipality and according to the following progressive scale: From to Rate per thousand , , , , , , , , , , , , , , , , Onwards

20 Other provisions Poupulation security law This is a special contribution over all financial operation, to promote the security of the population. The ongoing tariff for this Special Contribution over the financial operations is the following: Two Lempira s (L.2.00) over every thousand or fraction of thousand of all taxed financial operations. The Population Security law has term of Ten (10) years from January 31st of 2012; it was reformed under Decree Person s liable pay this levy Entities, owners of savings deposits. Owners of demand deposits or check accounts. That they obtain loans granted by the Financial Institutions with their own funds. That they purchase cashier's checks, certified checks, traveler's checks or other similar financial instruments that exist or are to be created. That they order payments or transfers in favor of third parties charged to the Money collected or collected on their behalf by the Financial Institutions. That they make transfers or remittances of money to the interior or exterior of the country. Credit card holders at the time of the annual renewal of their credit line or limit. 20

21 General Conditions Art. 7, Taxable base: the value of the transaction done within the financial institution. Transfer Pricing Ruling This regulation will become effective as of January 1, 2014, and must report on April 30, The purpose of these provisions is to regulate the commercial and financial operations that are carried out between related parties, valued in accordance with the principle of free or full competition. The scope of application, reaches any operation carried out between individuals or entities domiciled or resident related or linked to individuals or entities not resident or not domiciled and those covered by special regimes that enjoy tax benefits. Taxpayers of income tax who are related parties and who conduct commercial and financial transactions with each other, are obliged to determine for tax purposes, their income, costs and deductions, applying for such operations and operating results, prices and margins of utility that would have been used in comparable commercial and financial operations between independent parties. Electronic Invoicing, other Fiscal Documents and Printing Work Registry Bylaws Entered into force on January 1, 2018 through Agreement , this regulation aims to regulate the regulations to which the Tax Obligors are subject and facilitate the procedure of issuing Fiscal Documents and other activities related to the control of said documents, incorporating all sectors of the country's economy. The documents authorized by this regulation are: Invoice; Prevalued Invoice; Ticket; Receipt for Professional Fees; Ticket purchase; Proof of Donation; and, Other Tax documents that the Tax Administration authorizes. 21

22 Special regime In Honduras there are different tax benefits regimes, among which the most important are the Free Zone Regime (ZOLI) and the Temporary Importation Regime (RIT). The Free Zone Regime (Decree ), this regime grants exoneration of almost all taxes, except the tax on capital gains and the obligation to act as a withholding agent. The Temporary Importation Regime (Decree ) this regime grants exoneration of the tax on net assets, Solidarity Contribution, sales tax at the time of importation and payment of customs duties. In order to enjoy these benefits, a series of procedures must be carried out and certain obligations must be fulfilled. In addition, these exonerations have a term of twelve (12) years. Other laws with tax incentives In addition to those recognized as Special Export Regimes, in Honduras there are other laws that bring tax benefits for companies in other work lines or industries such as: Law for the Promotion of Tourism. Law for the Promotion of Electric Power Generation with Renewable Resources. Law for the Promotion and Protection of Investments. 22

23 Tax administration office (SAR) With the closure of the Executive Income Directorate Office(DEI) according to Executive Decree PCM , the Income Administration Service (SAR) is created according to Executive Decree PCM as a deconcentrated entity attached to the Presidency of the Republic, with functional, technical, administrative and national security autonomy, with its own legal personality, responsible for the tax administration, with authority and competence at the national level and with domicile in the Capital of the Republic. Principal functions: a) Comply and enforce the provisions of the Constitution of the Republic, International Agreements on Tax Matters, the Tax Code, Laws and other tax regulations; b) Supervise compliance with tax obligations, in order to combat tax evasion and elution; c) Create administrative management plans and programs in accordance with the guidelines of the economic policy and agreed annual collection goals; d) Promote the tax culture in the population through assistance programs, guidance and tax education; e) Establish and maintain relations with institutions, national and international organizations and cooperation agencies linked to the tax administration, as well as celebrate Agreements, Contracts and Agreements related to the performance of their functions; f) Administer the Tax System, exercising all the powers and faculties established in the Tax Code and other Laws and Regulations related to the matter; g) Manage the collection of taxes and charges established in the Tax Laws; i) Require from public or private third parties the accounting, financial, stock market, registry and any other information necessary for the fulfillment of investigative, control and auditing functions established in the Tax Code and other related Laws and Bylaws; j) Designate agents of Perception or Withholding of any tax or tax burden; k) Impose penalties in accordance with the provisions of the Tax Code and the laws in force, including the temporary closure of business sites where the operational, commercial, industrial, profession or trade activity is performed, when the taxpayer does not comply with tax obligations contained in the provisions set out above; l) Approve agreements of a particular and general nature for the efficient application of tax provisions; m) To resolve the proceedings initiated ex officio or at the request of a party within the framework of its competences; and, n) Any other power or attribution that is established and that were in the Laws and Bylaws attributed to the suppressed Executive Directorate of Income. h) Recover the attributable debts; 23

24 Contact us Rita Silva Socia Directora Deloitte Honduras Tegucigalpa Edificio Plaza América Colonia Florencia Norte Tel.: (504) Fax: (504) San Pedro Sula Torre Ejecutiva Santa Mónica Oeste Boulevard del Norte Tel.: (504) Fax: (504) Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see to learn more about our global network of member firms. Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and high-quality service to address clients most complex business challenges. More than 264,000 Deloitte s professionals make an impact that matters. This document contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this document, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this document. years Deloitte Honduras.