US-El Salvador tax obligations

If you’re a Salvadoran citizen living in the US or US citizen with assets in El Salvador, you have cross-border tax obligations with two systems: US IRS and El Salvador tax authority. This guide covers main points.

Official IRS tax treaty status — verified data

Official source: IRS — US Income Tax Treaties A-Z

Verified on: 2026-05-25

❌ El Salvador does NOT have a tax treaty with the US (verified against IRS on 2026-05-25).

NOT on IRS treaty list

Latin American countries with US tax treaty

Only 3 Latin American countries have a tax treaty with the US (IRS data 2026):

  • Chile (signed 2010, in force 2016)
  • Mexico (signed 1992, amended 2002)
  • Venezuela (signed 1999 — limited use due to sanctions)

Without treaty: what happens

If El Salvador has NO tax treaty:

  • El Salvador income is subject to US tax if you’re a US tax resident
  • NO reduced withholding rates on dividends/interest
  • Can claim Foreign Tax Credit (Form 1116) to avoid double taxation

Your El Salvador tax ID

In El Salvador, the tax ID is called NIT (Tax Identification Number). If you worked or had income in El Salvador, you should have one.

Your US tax ID

  • If you have SSN: use it
  • If you don’t have SSN: you need ITIN from IRS — see ITIN complete guide
  • ITIN allows fulfilling US tax obligations without work authorization

⚠️ NO US-El Salvador tax treaty

The US and El Salvador do NOT have a bilateral tax treaty. This means:

  • 30% withholding on US passive income for Salvadoran non-residents (dividends, interest, royalties, rentals)
  • NO automatic treaty reduction
  • Possible double taxation: paying Salvadoran tax authority on US-source income + IRS on same income
  • US Tax Credit (Form 1116) available for credits for taxes paid to El Salvador (mitigates but doesn’t eliminate)

FBAR (FinCEN 114) — accounts in El Salvador

If you’re a “US Person” (US citizen, permanent resident, or tax resident via Substantial Presence) and have bank accounts in El Salvador whose combined balances exceeded $10,000 USD at any point in the year, you MUST file FBAR (FinCEN Form 114) annually.

  • Deadline: April 15 (automatic extension to October 15)
  • Cost: FREE (electronic via bsaefiling.fincen.treas.gov)
  • Penalties: $10,000-$100,000+ for non-filing

See: FBAR complete guide

FATCA (Form 8938) — assets in El Salvador

If your El Salvador financial assets (bank accounts, stocks, funds) exceed FATCA thresholds, you must file Form 8938 with your federal IRS return.

Thresholds (US Persons living in US):

  • Single: $50,000 at year-end
  • Married filing jointly: $100,000 at year-end

See: FATCA complete guide

US + El Salvador dual nationality

El Salvador allows dual nationality with US. If you naturalize as US citizen, you keep Salvadoran nationality (verify El Salvador’s current rules).

Dual nationality tax implications:

  • Still tax with IRS on worldwide income (US taxes by citizenship)
  • Still tax with El Salvador tax authority on income generated in El Salvador (tax residency)
  • Cross Tax Credits (US Form 1116 + equivalent El Salvador credits) mitigate double taxation

Currency and conversion

El Salvador: USD (oficial desde 2001). When reporting Salvadoran income to IRS, you must convert to USD using IRS-published annual average exchange rate or December 31 rate.

If you have a business (Self-Employment / Independent Contractor)

If you live in US with ITIN and have freelance/business income:

  • Schedule C (business profit/loss)
  • Schedule SE (Self-Employment Tax 15.3%)
  • 1099-NEC from your US clients
  • FEIE does NOT apply (you’re IN the US, not abroad)

See: Filing taxes with ITIN

Official source: IRS International Taxpayers · FinCEN FBAR

Cross-border tax obligations are complex — consult a CPA or tax attorney with international experience.

Last verified: 2026-05-24.

General procedural information for educational purposes. Not legal, tax, or immigration advice. Laws and fees change — verify with the issuing agency before taking action. For case-specific guidance, consult a licensed immigration attorney or other appropriate professional.