Emerging Markets Rates and Currencies Handbook

Tax Summary – El Salvador El Salvador rules must be met. • The interest expense should not be deductible if it exceeds the result of applying to the loan operation, the average interest rate over credits granted to companies applied by the Salvadoran Financial System and published by the Salvadoran Central Reserve Bank, plus four additional points. * • Thin capitalization rules: interest payments should not be considered deductible when the lender is a related entity, and the following thin capitalization rule is not met: the relationship between debt (acquired with related parties and individuals or legal entities in Tax Haven jurisdictions) and the average equity of the borrower exceeds three times. * • *Also applicable in operations with Tax Havens. Deductibility • Realized FX losses should be deductible for IT purposes. • N/A Country Tax Deductibility and Considerations Inter-Co Debt Offshore Derivatives Equities Local Borrowing Bank Loans Offshore