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Tax Guide

Financial Year – 1 January-31 December
Currency – Quetzal

Corporate Tax Summary

Residence – Guatemala operates a territorial tax system under which residents and nonresidents area taxed only on Guatemala-source income. This same case applies to foreign companies and their branches. When foreign companies conduct their corporate activities in Guatemala through a fixed place of business they are deemed to have a permanent establishment (PE) in Guatemala. The Guatemala source profits earned by the PE will be subject to the income tax.

The 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 of them. It is a tax for any individual or legal person, national or foreign, resident or not in the country that carry out taxable activities in accordance with the law.

Basis of Taxation – The Income Tax Law considers two regimes under the chapter of Profitable Activities:

  1. Regime based on Net Profit: Taxable basis: Rate 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 nonresident 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.
  2. Optional Regime based on Gross Revenue: Taxable basis: Monthly gross revenue. Rate: progressive rates of 5% and 7%. first revenue tier applies up to USD4,000.
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

Residence – Value-Addet Tax – VAT: It 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.

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)

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
  • 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
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: 31.12.2019

Contact us:

CEO in Guatemala
Byron Méndez Sagastume
CEO & Managing Partner
Mobile: +502 5528-2953