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Guatemala made paying taxes easier for companies by introducing a new electronic filing and payment system.
Guatemala made paying taxes easier and less costly for companies by enhancing the electronic system for filing and paying corporate income tax and VAT and by reducing the capital gains and corporate income taxes. On the other hand, it also made paying taxes more complicated by introducing a new form for capital gains tax.
Guatemala made paying taxes less costly for companies by reducing the corporate income tax rate.
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SOURCE: DOING BUSINESS DATABASE
Guatemala continues to make it easier to do business in terms of paying taxes. The nation rose four spots in the World Bank Group’s Doing Business rankings in the tax category, and now stands second only to the Bahamas in the region.
the near future. This 1 percent tax is assessed on those perform- ing commercial or agricultural activities within the Guatemalan borders and who experience a gross margin increase of 4 percent over their gross income. The solidarity tax is paid to the Tax Administration on a quarterly basis and establishes two forms of accreditation. One is that it is paid quarterly and accredited to the payment of the income tax over the following three years. The other is that the quarterly income tax may be accredited to the solidarity tax within the same year.
TAX INCENTIVE LAWS & TRANSFER PRICING
Income tax exemptions of 10 years may be administered under the following regimes: Free Trade Zones for administrators, industrial users, and service users (the exemption is five years for commercial users); Law of Incentives for the Development of Renewable Energy Projects; Temporary Admission from legally authorized exports; Reimbursement of Duties on income from exports; and Exportation of Total Locally Added Component.
Though there are few, some exclusions do exist. In Free Trade Zones, fishing and breeding of fish may not be performed. Natu-
ral rubber and goods that pollute also may not be produced, and the processing of radioactive materials is also forbidden. Mining may not be performed, and natural rubber may not be extracted from these zones either. Temporary Admission also has some no- table exclusions. Coffee, cardamom (in berry form), parchment, and gold are not a part of this incentive. Additional goods that are excluded are sesame seeds, fresh bananas, cattle, sugarcane and molasses, uncarded cotton, crude oil, and wood. These same items are also excluded in the Reimbursement of Duties and
the Exportation of Total Locally Added Component incentives offered by the Guatemalan government.
Transfer Pricing rules include three very important regu- lations. The Field of Application rule applies to activity be- tween a resident of Guatemala and a non-resident. The Arm’s Length Principle is between two unrelated parties who have independently agreed upon a transaction that is based on information from comparable transactions. The third and final regulation is the Principle of Onerous Title, which states that a transaction between two parties is assumed to be consummated at market value unless there is evidence to the contrary.
SPECIAL REPORT
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