Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

January 19, 2023

Honduras’ ZEDE regime is recognized as abolished following review by OECD Forum on Harmful Tax Practices

  • On 5 January 2023, the new results of the Peer Review on Harmful Tax Practices were published, reflecting the "Abolished" status of the Honduran Special Development and Employment Zones (ZEDE) regime.

  • This status was determined after the Honduran National Congress approved the total repeal of the ZEDE regime in the country on 20 April 2022.


On 27 July 2022, the Organisation for Economic Co-operation and Development (OECD) published the results of the Harmful Tax Practices Peer Review Results, through which it reviews, among others, the potential harmful aspects of certain preferential regimes under Action 5 of the Base Erosion and Profit Shifting (BEPS) Action.

In that review and as a result of the meeting held in April 2022 by the Forum on Harmful Tax Practices (FHTP), the conclusions on 12 preferential regimes were updated, including the ZEDE regime and the Free Zones (ZOLI) regime, with the observation that there were potentially harmful aspects that needed to be addressed.

ZEDE regime abolishment

ZEDEs were initially established as areas of Honduran territory subject to a special regime within which investors would be in charge of fiscal, security and conflict resolution policies. However, on 20 April 2022, the Honduran National Congress approved the total abolishment of the ZEDEs in the country.

The elimination of the ZEDEs was achieved through the derogation of the constitutional reform of approval and ratification containing the creation, operation and of all matters concerning the Employment Zones, as well as the decree containing the Organic Law (approved on 12 June 2013).

New Harmful Tax Practices Peer Review Results

On 5 January 2023, the new findings of the Peer Review on Harmful Tax Practices were published, based on the FHTP meeting held in November 2022.

In accordance with these findings, the status of abolished is recorded in relation to the ZEDE regime, expanding on the fact that no grandfathering is foreseen for the same.

Finally, it is important to note that the FHTP has not yet issued a pronouncement on the other preferential tax regimes currently in force in Honduras, such as the ZOLI regime (included in the July 2022 results) and Call Centers and Business Services Outsourcing.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Honduras, S. de R. L.

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more