Guatemala

Individual - Income determination

Last reviewed - 08 July 2020

Employment income

Quantifiable fringe benefits (e.g. housing allowance, living allowance, tax reimbursement) are considered taxable income.

Non-resident aliens are taxed on salary earned for work done in Guatemala, regardless of where payment is made and regardless of whether it is remitted.

A non-resident alien's salary income from a Guatemalan source is subject to income tax withholding at 10%.

Compensation related to services performed outside Guatemala is not taxable.

Payment of incentive bonus to employees

An addition to normal compensation is to be paid to all employees, as determined by an incentives plan commonly agreed on between the corporation and the labour force (this bonus must be equal or higher than GTQ 250 per month). This bonus is exempt for employee/employers social security contributions.

This additional compensation for the employee is exempt from social security contributions. It is treated as a deductible item for the employer.

Capital gains

Guatemalan-source capital gains are taxed at a flat rate of 10%. Capital gains and investment income from outside the country are not taxed by Guatemala.

Capital losses can be netted only against capital gains.

Dividend income

A non-resident alien's dividend income from a Guatemalan source is subject to income tax withholding at 5%.

Interest income

Interest income earned by domiciled persons is subject to income tax withholding at 10%.

A non-resident alien's interest income from a Guatemalan source is subject to income tax withholding at 10%.

Other income

A non-resident alien's income from professional fees, royalties, and technical and professional advice from a Guatemalan source is subject to income tax withholding at 15%.

A non-resident alien's other income from a Guatemalan source is subject to income tax withholding at 25%.