VAT collected is regarded as a tax debit while VAT paid is considered a tax credit. Companies engaging in export activities are eligible to obtain tax credit reimbursements. A three per cent tax rate of the value stipulated in legal documents is applied. Transactions subject to Value Added Tax are not subject to the Stamp Tax. Except for items covered by special industrial incentives or purchased directly by governmental agencies, imports from outside the Central American region are subject to a tariff ranging between zero and seventeen per cent ad valorem on CIF value.
Capital goods imported from outside Central America do pay a zero per cent tariff.
All foreign currency transactions must be made through approved financial institutions. A form must be filled out for all transactions involving foreign investments, remittance of dividends and repatriation of capital. Other than compliance with applicable taxes, no further control and restrictions apply for the remittance of profits and repatriation of capital. The foreign currency exchange rate floats freely and is determined by the market. Immigration legislation All immigration matters are regulated by Decree 22-86, which oversees the admission of immigrants and their activities.