Guatemala

Corporate - Income determination

Last reviewed - 08 July 2020

Inventory valuation

For tax purposes, taxpayers are authorised to use any of the following methods for valuing stocks (i.e. inventory), provided they technically fit the taxpayers' business and are consistently applied:

  • Cost of production.
  • First in first out (FIFO).
  • Weighted average.
  • Historical price of assets.
  • Estimated cost at a fixed price (additional for livestock activities).

Capital gains

The regime of capital income, capital gains, and capital losses is established with the following tax rates:

  • Real estate equity income: 10%.
  • Income from trading movables: 10%.
  • Capital gains and losses: 10%.
  • Incomes from lotteries and raffles: 10%.

Capital losses can be netted only against capital gains, up to a maximum of two years.

Dividend income

Dividends earnings and profits are subject to a 5% income tax.

Interest income

All interest income is subject to a 10% income tax.

Royalty income

Royalties are taxed at a 15% WHT rate.

Foreign income

Foreign-source income received by a domestic corporation is non-taxable under Guatemalan income tax law, provided that it does not relate to a service or activity rendered in Guatemalan territory.