Value-added tax (VAT)
A 12% VAT is levied on the sale or transfer of merchandise and on non-personal services rendered or effected in Guatemala. The tax is payable to the government by way of the invoice method, whereby the tax charged to the customers is offset by the VAT paid over purchases, and the government collects the net resulting amount. The issuance and circulation of credit titles is VAT-exempt.
Sale of goods
The taxable amount on the sale of goods includes the sales price, less any discounts provided under sound commercial practices, plus other charges shown on the invoice.
The taxable amount of services includes the price of the service, less any discounts provided under sound commercial practices, plus financial charges and products used to render the services.
Imports and leases
The tax base for imports is the value declared for import duties computation purposes.
The tax base for leases of movable or immovable property is the value of the lease.
Exempted sales and services
The following items are exempt from VAT:
- Importations made by:
- cooperatives legally constituted as registered on imported machinery, equipment, and other goods relating to the activity or service of the cooperative
- individuals and juridical entities under temporary importation regulations, and
- diplomatic and consular missions accredited before the Guatemalan government.
- Banking institution services and their agents.
- The issuance, circulation, and transfer of credit bonds, value bonds, and stocks of any kind.
- Interest accrued by credit bonds and other obligations issued by mercantile partnerships, negotiated through an authorised stock exchange.
- Exports of goods and services.
- Contributions and donations to educational, cultural, assistance, or security service partnerships, constituted as not-for-profit entities.
The amount payable to the Superintendencia de Administración Tributaria (SAT), Guatemala’s tax authority, is the difference between the debits and credits accrued during the tax period (one month) and is paid monthly by filing a tax return in the calendar month following the end of each tax period.
Refunds of VAT
The VAT credit can be claimed on monthly, quarterly, or semiannual tax periods. The refund of VAT credit corresponds to exporter taxpayers who cannot offset the VAT credit with VAT debits.
In addition, the VAT credit can be claimed by those taxpayers who have a high percentage of sales to entities exempt from VAT.
The Customs Duties on Imports (DAI) are contained in the Central American Tariff System (SAC), which contains the tax rates applicable to goods imported into the Guatemalan Territory, ranging from 0% to 20%.
The import duties apply to the customs value declared by the importer.
Excise taxes are applicable to specific activities, such as fuel distribution tax, alcohol and beverages distribution tax, and tobacco distribution tax.
Fuel distribution tax
|Product||GTQ per gallon|
|Avjet turbo fuel||0.5|
|Petroleum liquid gas||0.5|
Alcohol and beverages distribution tax
|Other fermented cereal drinks||6.0|
|Distilled alcoholic beverages||8.5|
|Alcoholic mixed beverages||7.5|
Tobacco distribution tax
Tobacco distribution tax is 100% of the factory selling price of a 10-pack package.
Real estate taxes
Real estate taxes are assessed annually at GTQ 2 per thousand on declared property values from GTQ 2,000 to GTQ 20,000, at GTQ 6 per thousand on values from GTQ 20,000 to GTQ 70,000, and at GTQ 9 per thousand on values in excess of GTQ 70,000 (e.g. property valued at GTQ 1 million will pay real estate taxes of GTQ 9,000).
Transfer of property
VAT is payable on the first sale of real estate, and subsequent sales are taxed under the stamp tax regime.
Other than sales invoices, contracts, and documents subject to VAT, and other minor exemptions, a stamp tax must be paid on all documents covering commercial and legal transactions (e.g. collection of dividends), either by preparing the document on papel sellado, which is special stamped paper, or by affixing stamps on the documents. This tax is also assessed on documents issued abroad, other than drafts or promissory notes and commercial invoices from foreign suppliers. Letters of credit and acceptances involving international transfers of funds are generally exempt from stamp taxes.
The normal tax rate is 3% and is calculated on the face value of the documents or on the gross value of the related transaction.
The stamp tax on dividend payments or credits has been repealed, and a 5% income tax should be paid on dividend payments or credits in account equity.
Solidarity tax (Impuesto de Solidaridad or ISO)
The ISO tax rate of 1% is assessed on the net assets of a corporation, or on the gross income of a corporation, whichever is higher, and there is no limit on the amount to be paid. Tax paid may be credited against the corporation’s income tax. If the ISO exceeds the income tax, no reimbursement is possible.
The tax is to be paid quarterly on the basis of the corporation’s opening balance sheet for each fiscal period.
There are no payroll taxes other than social security contributions (see below).
Social security contributions
Corporations contribute 12.67% of their monthly payroll and employees contribute 4.83% of their monthly salary to social security.