Guides a Nicaraguan independent professional or freelancer through their annual income-tax obligation under the rentas de actividades económicas regime (Ley 822), from regime selection (cuota fija vs general IR) through to filing the annual IR return with the DGI and settling any balance due.
Establish the client's identity, residency status, and whether they qualify for the simplified cuota fija regime or must file under the general rentas de actividades económicas regime. The DGI assigns most small traders and artisans to cuota fija (a fixed monthly presumptive tax replacing IR and IVA), while professionals and higher-revenue businesses fall under the general IR. Getting this right up front determines every subsequent step.
Collect and classify all income and deductible business expenses for the tax year. Under the general IR regime, Ley 822 (LCT Art. 38–45) allows deduction of ordinary and necessary business costs including purchases, payroll, INSS patronal/INATEC paid by the business, depreciation, and professional fees. Personal expenses, INSS laboral paid by the owner, and non-documented costs are disallowed.
Compute net taxable income (ingresos gravables menos costos y gastos deducibles) and apply the progressive IR scale or the applicable proportional rate under the general rentas de actividades económicas regime. Confirm whether any advance payments (anticipos IR, typically 1% of monthly gross revenue remitted monthly) have already been made and will be credited against the annual liability.
Assess whether the client is registered for IVA (Impuesto al Valor Agregado) at 15%, and if so confirm that monthly IVA declarations (Form IVA-1) were filed and settled. Self-employed professionals providing services subject to IVA must charge 15% on invoices and remit net IVA (output minus creditable input IVA) monthly. Failure to register or file is a common DGI audit trigger for independent contractors.
Prepare and submit the annual IR return (declaración anual) via the DGI's VET (Ventanilla Electrónica Tributaria) online portal. The return is due within 90 days of the calendar year-end — approximately 31 March. Any balance due (IR a pagar) must be settled at that time; overpayments (saldo a favor) may be credited against future anticipos or requested as a refund. Confirm the client's DGI account is in good standing before submitting.
Confirm all obligations are settled, organize the tax file for the mandatory DGI retention period (five years under the LCT), and schedule next year's monthly antecipo IR and IVA-1 filings. Brief the client on any regime changes — for example, if revenue growth pushes them past the cuota fija threshold, they must notify the DGI and migrate to the general IR regime proactively.
Run this workflow in your AI agent
Install the MCP connector once — your agent loads the right skills, works through each phase, and routes to a licensed Nicaragua accountant for review.