The tax liability to Bolivian corporate income tax (IUE) is exclusively based on the Territoriality Principle. Therefore, IUE tax applies both to resident and non-resident companies, provided that a nexus exists between the earnings and the Bolivian territory, disregarding the nature and the source of the income, the nationality of the parties and the place of conclusion of the contracts.

The Bolivian corporate income tax is not a global tax, which means that the taxable base is determined by aggregating only the income of the Bolivian source.

Financial statements prepared in accordance with General Accounting Principles constitute the starting point for the assessment of the taxable base. Tax adjustments (special deductions, depreciations, etc.) to the financial statements are required in order to arrive the final taxable base.

All corporate income taxpayers are, accordingly, required to keep regular accounts based on an accrual basis.

The corporate tax is assessed on the “net profit”, including capital gains from the sale of fixed and mobile assets.

Corporate tax was also levied on professionals since they were included in the definition of “enterprise”. However, with the publication of Law No. 1448 on 25 July 2022, the personal income tax rules are extended to income earned by professionals, which was hitherto subject to corporate tax.

Certain income is exempt, not taxable, or excluded (see Sec. 6.6.).

Taxable income includes both operating income, passive income (e.g., real estate income, loan interest, profit shares of partnerships), and extraordinary income (e.g., capital gains, gains from the revaluation of fixed assets, subsidies, earnings from stock exchange transactions, waivers of debt by a creditor and indemnities). Taxable income (or expenses) must be expressed in Bolivianos; foreign currency values must be converted at the final rate for the day on which the accounting entry occurs.

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