By: Lic. Luis M. Canales

Managing Partner at CALA ACCOUNTING

Running a business in Nicaragua involves more than just selling or delivering a good service. It also means taking on tax, accounting, and legal responsibilities that — if not properly managed — can become serious issues with the General Revenue Directorate (DGI), the local municipality, or even the courts.

One of the most effective tools to protect your company — and yourself as a legal representative or shareholder — is to conduct an external audit every year, even if the law does not explicitly require it.

What is an External Audit?

An external audit is an independent, objective, and professional review of your company’s financial statements, accounting records, tax filings, and other legal obligations. This review is performed by a certified external auditor who assesses whether your records reflect the economic reality and comply with current regulations.

Beyond the technical aspects, an external audit gives you clarity, confidence, and control over your business's real situation.

Tax and Municipal Obligations Every Company Must Comply With

In Nicaragua, many business owners believe that filing their annual income tax return is enough. However, all corporate entities must comply with a wide range of obligations before different authorities, including:

1. General Revenue Directorate (DGI):
• Monthly VAT filing and payment.
• Income tax withholdings for employees, suppliers, and third parties.
• Annual income tax return.
• Informative filings (withholding annexes, purchase and sales reports).
• Use of authorized fiscal documents (legal invoicing).
• Monthly minimum income tax payments (advanced tax payments).
• Compliance with transfer pricing regulations (if applicable).

2. Municipal Government:
• Registration and renewal of the Municipal Business License (Matrícula Municipal).
• Filing and payment of the Municipal Income Tax (1% to 2% depending on activity).
• Municipal service fees, signage permits, and other local charges.
• Operational requirements: land use permits, fire safety clearance, health regulations, etc.

3. Other Government Entities:
• Registration and payment to the Nicaraguan Social Security Institute (INSS) if you have employees.
• Submission of periodic labor and tax reports.
• Compliance with RUC registration, electronic invoicing, or other Ministry of Finance requirements.

Failure to comply with these obligations can lead to fines, temporary closures, asset seizures, and even legal proceedings.

How Does an External Audit Help You?

An audit not only detects errors — it also offers solutions and preventative recommendations. At CALA ACCOUNTING, our audits follow a comprehensive approach: legal, tax, and business-focused.

With an external audit, you can:

• Identify accounting or tax errors before an inspection by DGI or the municipality.
• Correct miscalculated payments or improperly applied deductions.
• Ensure your accounting records are up to date and legally compliant.
• Meet municipal regulations and avoid local penalties.
• Prepare for a formal tax audit or fiscal inspection.
• Enhance internal transparency and strengthen corporate governance.

The Audit Protects Your Company… and Also You

Many business owners are unaware that the Commercial Code and tax legislation hold legal representatives and shareholders jointly liable for corporate non-compliance.

An external audit proves that you acted diligently — that you reviewed your company’s financial and tax situation and took corrective action on time.
In other words: auditing protects your personal assets.

Why Choose CALA ACCOUNTING?

Because we are more than just an accounting firm. At CALA ACCOUNTING, we work as a multidisciplinary team of certified public accountants, auditors, and lawyers with extensive experience in both local and international businesses.

We offer you:
• Clear, practical, and actionable reports.
• Direct support to correct findings and improve processes.
• Enhanced credibility with banks, investors, and government authorities.
• Peace of mind during tax inspections or legal reviews.

An external audit is not an expense — it’s a strategic investment in your company’s compliance and sustainability.

Looking for fiscal and financial peace of mind?
📞 Contact us today and schedule your free initial consultation.
Your business deserves clarity. You deserve to sleep peacefully.