Guatemala
Financial Year – 1 January – 31 December
Currency – Guatemalan quetzal (GTQ)
Corporate Tax Summary
Residence – Guatemala operates a territorial tax system under which residents and non-residents area taxed only on Guatemalan source income. The same applies to foreign companies and their branches. Foreign companies are deemed to have a permanent establishment (PE) in Guatemala if they conduct their corporate activities in Guatemala through a fixed place of business. The Guatemalan source profits earned by the PE will be subject to income tax.
Income Tax, also called ISR, is the direct tax that is applied in Guatemala to the income obtained by any entity, from capital investment, work or the combination of both. It is a tax applicable to any individual or legal person, national or foreign, resident or non-resident which carry out taxable activities in accordance with the law.
Basis of Taxation – Income Tax Law defines two regimes under the chapter of profitable activities:
- Regime based on net profit:
Taxable basis: 25%. Expenses are deductible for depreciation, intangible assets, start-up expenses, interests, bad debts, all taxes except for income tax and value added tax, and certain donations. Transfer pricing rules apply for transactions between a resident and a non-resident related party.
Declaration period: Advance payments made in April, July, and October based on quarterly accounting closures or presumed income of 8% over gross revenue. - Optional Regime based on Gross Revenue:
Taxable basis: Monthly gross revenue.
Rate: progressive rates of 5% and 7%. The first revenue tier applies up to USD 4,000.
| Reference | ||
| Corporate Income Tax Rate (%) | 25% | Decret0 10-2012 |
| Branch Tax Rate (%) | 1% | Decreto 73-2008 |
| Withholding Tax Rate: | ||
| Dividends – Franked | 5% | Artículo 93, Decreto 10-2012 |
| Dividends – Unfranked | 5% | Artículo 93, Decreto 10-2012 |
| Dividends – Conduit Foreign Income | 5% | Literal e., numeral 1., artículo 104, Decreto 10-2012 |
| Interest | 10% | Literal a., numeral 2., artículo 84 y artículo 9, Decreto 10-2012 |
| Royalties from Intellectual Property | 10% | Literal b., numeral 2., artículo 84 y artículo 92, Decret0 10-2012 |
| Fund Payments from Managed Investment Trusts | N/A | |
| Branch Remittance Tax | Literal e., numeral 1., artículo 104, Decreto 10-2012 | |
| Net Operating Losses (Years) | ||
| Carry Back | N/A | |
| Carry Forward | Compensation of losses with future earnings is not allowed. |
Individual Tax Summary
The VAT rate is 12% for all purchases of goods and provision of services, as well as the sale of local goods, except for export.
In Guatemala there is no differentiation of VAT rate by marital (Filing) status in terms of rates.
The ISR rates for employees residing in Guatemala described in Title III of Decree 10-2012 comply with the following table in Article 73, as follows
| 0 to Q300,000 in an anual basis (equivalent to US$38,500) | 5% over taxable income |
| Q300,000 anualy or more (equivalent to US$ 38,500): | 7% on the surplus of Q300,000. |
Filing Status – Its payment is compulsory for any individual or legal person that regularly or regularly performs acts taxed according to the law.
Personal Income Tax Rates
| Taxable Income | Tax Payable – Residents |
| Q0.001 to Q300,000 (USD39,000 aprox) | Q0.00 5% |
| Q300,000 or more (US$39,000 aprox or more) | Q15,000 (USD2,000) 7% over the excedent of USD39,000 aprox |
| Supply of international news to user companies in | 3% |
| Airfare and Freight | 5% |
| Telephony and data transmission | 5% |
| Dividends | 5% |
| Interest paid or credited to non-residents | 10% |
Non residents:
- Salaries and wages, allowances, commissions, bonuses: 15%
- Payments or accreditation in bank accounts to athletes and theater artists: 15%
- Royalties: 15%
- Fees: 15%
- Scientific, economic, technical or financial advice: 15%
- Other taxable income not specified above: 25%
Goods and Services Tax (GST)
Residence – Value Added Tax (VAT) is is levied over the sale and import of tangible goods, the sale or transfer of rights over intangible goods, and the provision of services. The subtraction method is used to estimate the VAT amount, crediting VAT on purchases against VAT liabilities arising from sales. Taxable basis. The sale invoice or transaction amount.
It is a specific tax, which is generated by the sale or exchange of movable or immovable property located in the national territory, real rights constituted on them and the provision of services. Its payment is compulsory for any individual or legal person that regularly or regularly performs acts taxed according to the law.
Basis of Taxation
- Rate VAT: 12% with a preferential rate of 0% applied to exports.
- Declaration period: Monthly payments.
- Concept Fee: The sale or exchange of personal property. The provision of services in the national territory. Imports. The leasing of movable and immovable property. The adjudication of movable and immovable property in payment. Withdrawals of movable property made by a taxpayer or by the owner. Destruction, loss or any fact that implies missing. inventory. First sale or exchange of real estate. Living donation of movable and immovable property. The contribution of real estate to companies.
| Rate | 12% |
| Taxable Transactions | Concept Fee: The sale or exchange of personal property. The provision of services in the national territory. Imports. The leasing of movable and immovable property. The adjudication of movable and immovable property in payment. Withdrawals of movable property made by a taxpayer or by the owner. Destruction, loss or any fact that implies missing. inventory. First sale or exchange of real estate. Living donation of movable and immovable property. The contribution of real estate to companies. |
| Registration | |
| Filing and Payment |
Other Taxes Payable
| Tax | Reference |
| Payroll Tax |
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| Stamp Duty (Transfer Tax) | Stamp Tax A Special Sealed Paper Tax for Protocols is established, with a specific rate of ten Quetzales (Q10.00) for each sheet. The tax is determined by applying the rate of value of the acts and contracts subject to the tax. The value is reflected in the document, which cannot be less than that registered in public records, property records or on official lists. The tax rate is three percent (3%). The tax is determined by applying the rate to the value of the acts and contracts affected. The second and subsequent sales or swaps of real estate are subject to this tax. |
| Land Tax | Property Tax The tax base is the value of the tax registration according to the information from the Land Registry Property of the Republic of Guatemala. Deadline for submission is the month immediately following the expiration of the calendar quarter. Taxable event, owning real estate in the territory of the Republic of Guatemala. Rate: Property Value Rate Up to Q. 2,000.00 Exempt From Q. 2,000.01 Q. 20,000.00 2 per thousand From Q. 20,000.01 to Q. 70,000.00 6 per thousand From Q 70,000.01 Onwards 9 per thousand |
Last updated: 16.04.2021