HONDURAS Trends and Developments Contributed by: Alberto Zúniga and Carlos Zúniga, Baker Tilly Honduras
disputes placed the durability of special regimes and pre-existing tax framework under scrutiny. The administrative stability framework Investors evaluate how tax rules are applied in prac - tice. Stability requires consistent interpretation across regional tax offices and predictable audit procedures. Regional administrative variation remains a relevant factor when advising international clients. Although tax legislation applies uniformly across the country, audit decisions and review timelines often reflect geo - graphic realities for investors. Practitioners frequently experience more concise response times in cities like San Pedro Sula, where manufacturing and economic growth is concentrated, while case saturation in the capital city Tegucigalpa (where most central bureau - cratic offices are located) can result in longer process - ing periods that tend to lead to increased legal and administrative fees. Tourism-heavy regions present additional and unu - sual dynamics. A clear example is the Bay Islands in the Caribbean part of Honduras, where a special regime known as the Zona Libre Turística de Islas de la Bahía (Legislative Decree No 113-2007) or “ZOLITUR” grants broad tax incentives, yet institutional outreach in those areas has historically been limited. From a tax standpoint, ZOLITUR was designed to stimulate investment in tourism, real estate development, hos - pitality and related service industries through a pack - age of fiscal incentives that differ from the standard national tax framework. This type of tax coverage in a tourism-dependent region enables investments of all different sectors that will inevitably correlate with tourism as a driving factor for obtaining tax incentives. The inauguration of a dedicated government tax agen - cy presence in the Bay Islands as recently as 2023 reflects efforts to address that potential imbalance in this tourism-centric area. Although administrative capacity remains in development, this regime and its durability will certainly be put to the test in terms of the overall benefits of its renewal once the Regime subsides for most investors, as no more companies can adhere to this special Regime.
A clear example of the evolution of Honduran tax frameworks can be seen in the digital modernisation introduced through the Virtual Office platform under the prior administration in 2024, aimed at creating progress in tax management and notification systems for all taxpayers and the administration. In practice, however, in-person procedures often remain the most effective method for resolving audits and mitigating risk. The coexistence of digital and physical processes has required practitioners to adapt without yet deliver - ing a fully streamlined experience. While digital tools have strengthened oversight capac - ity, official data regarding measurable increases in audit activity or enforcement intensity remains lim - ited. The tax administration’s stability will depend not only on technology framework but also on consistent administrative practice across regions and sectors. Continuation of incentives Honduras continues to rely on sector-specific regimes as core components of its tax structure. Free Trade Zones provide exemptions from municipal taxes and corporate income taxes within statutory limits, as well as customs-related benefits. The Temporary Import Regime offers the suspension of customs duties and defined tax relief periods. Tourism incentives under the Tourism Incentive Law continue to apply to qualify - ing projects authorised before 2014. Call centre and BPO operations benefit from income tax exemptions on incentivised revenues and duty exemptions for equipment. The Bay Islands Free Tourist Zone main - tains broad exemptions, subject to statutory time lim - its and initial filings. The mining and renewable energy sectors operate under distinct fiscal frameworks com - bining sector-specific levies with targeted incentives. Honduras maintains a historical trade deficit, and exports such as coffee, textiles and palm oil remain the primary contributors to national production. Tax incentives have traditionally aligned with export-ori - ented and manufacturing sectors, making the Tempo - rary Import Regime a central feature of the country’s fiscal structure. The extension of the Temporary Import Regime for an additional five fiscal years represented a signifi - cant policy decision, signalling the continuation of
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