Corporate Tax 2010 - BMR Advisors

Chapter 22
Guatemala
Arias & Muñoz
José Augusto Toledo Cruz
1 General: Treaties
1.1 How many income tax treaties are currently in force in
[Country]
There are no income tax treaties in Guatemala.
1.2 Do they generally follow the OECD or another model
Not applicable - please see question 1.1 above.
1.3 Do treaties have to be incorporated into domestic law
before they take effect
Yes, treaties have to be incorporated into domestic law before they
take effect. The applicable procedure is the following:
1. The treaty must be approved by the Congress.
2. It must be ratified by the President of Guatemala.
3. The treaty must be published in the government’s Official
Publication Journal (Diario Oficial). This would provide the
official publication.
1.4 Do they generally incorporate anti-treaty shopping rules (or
“limitation of benefits” articles)
This is not applicable in Guatemala.
1.5 Are treaties overridden by any rules of domestic law
(whether existing when the treaty takes effect or
introduced subsequently)
Yes, they are overridden by the Constitution of the Republic of
Guatemala.
2 Transaction Taxes
2.1 Are there any documentary taxes in Guatemala
Yes. A stamp tax exists, with a general tariff of 3%. The tax will
be determined by applying the tariff according to the value of
applicable acts and contracts. This tax does not apply when the
Value Added Tax (VAT) applies.
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
Yes. Value-added tax of 12% is applied to transfers of goods and
services. Some exclusions apply.
2.3 Is VAT (or any similar tax) charged on all transactions or
are there any relevant exclusions
The general principle is that VAT is charged on all transfers of
goods and services. The exceptions are regulated by the VAT law,
which establishes cases of specific and general exemptions.
2.4 Is it always fully recoverable by all businesses If not,
what are the relevant restrictions
The general principle is that VAT is charged on all transfers of
goods and services. The exceptions are regulated by the VAT law,
which establishes cases of specific and general exemptions.
2.5 Are there any other transaction taxes
No, VAT is the only transaction tax applicable in Guatemala.
2.6 Are there any other indirect taxes of which we should be
aware
There are several indirect taxes such as: property taxes; revaluation
taxes; excise taxes (imposed on beverages, cigarettes, cigars,
gasoline, oil-related products, cement, licence plates, and air fares);
tax on financial products; and the IETAP (Extraordinary and
Temporary Tax for Guatemalan Peace Agreements). This last one
was due to expire at the end of 2008.
3 Cross-border Payments
3.1 Is any withholding tax imposed on dividends paid by a
locally resident company to a non-resident
Remittance of dividends is exempt from withholding tax, provided
the company paying those dividends has are paid its income tax in
Guatemala.
ICLG TO: CORPORATE TAX 2010
© Published and reproduced with kind permission by Global Legal Group Ltd, London
WWW.ICLG.CO.UK
115