Capital Gains Taxation in Bolivia, Plurinational State of
Definition of Capital Gains
In Bolivia, capital gains are defined as the profits obtained from the sale or disposal of certain assets, including:
- Real estate properties
- Stocks and bonds
- Business assets
There is no distinction between short-term and long-term capital gains for tax purposes.
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Bolivia are taxed at a flat rate of 13%. This rate applies to all categories of capital gains, regardless of the holding period or the nature of the asset.
Legal Framework
The taxation of capital gains in Bolivia is governed by the following legal provisions:
- Article 10 of the Tax Code (Código Tributario Boliviano)
- Supreme Decree No. 24051 of 2003
- Resolution No. 10-0013-03 of the National Tax Service (Servicio de Impuestos Nacionales)
These provisions outline the tax treatment of capital gains, including the definition of capital gains, the methodology for calculating taxable gains, and the applicable tax rates.
Policy Objectives
The capital gains tax system in Bolivia aims to:
- Generate revenue for the government
- Ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
- Promote investment and economic growth by providing incentives for capital formation
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