The only real taxes that have caught people off guard in Nicaragua are import and duty taxes.
Recently, there was a news article in a Nicaraguan newspaper of national distribution about some of the institutions that many business people viewed as being corrupt. It was interesting that the second place institution out of all these institutions, including everything from city government, federal government, police, and so on, that were viewed as being the most corrupt was the customs agency, the Dirección General de Servicios Aduaneros (DGA). The first place winner was the DGI, which is the IRS equivalent here in Nicaragua.
It’s interesting that the import and duty taxes are many times what catch a lot of people off guard. A lot of people who come here just never imagined or never thought that they would pay so much in taxes for trying to bring, for example, a car here. Bringing in a car is very difficult to do.
There are tax benefits or laws that try to either reduce or eliminate any tax liability for bringing in a car or even household items when you move down here. But if you’re just traveling to Central America and your idea is to come to Nicaragua to live and you’ve been traveling in a car and you just wanted to import your car, there are a lot of taxes to pay. It can be a very expensive. I even heard stories where it’s literally just not worth it because at the end of the day you’re almost paying what the car is valued at in taxes.
Expats have also had very negative experiences with household goods being held in warehouses. There have even been some experiences where the customs doesn’t want to give the goods or release them to the owner because of what they might claim as discrepancies on declared value or similar issues.
Exporting is different. To export something it’s a lot easier to do but to import into Nicaragua is actually very difficult or can be difficult. I wouldn’t say it’s impossible. I won’t say it’s something you shouldn’t do or you should not try to do. But just be aware that there have been negative experiences and it’s just something you should take care of when you’re trying to do it. And you should also be aware that there can be a fair amount of taxes that you are going to be paying in the process.
If you want to keep from getting a headache, I would definitely suggest instead of bringing in a car, just buy a car here. It’s definitely a lot easier.
(Red station wagon in Nicaragua, pictured.)