Guatemala

In Guatemala, a 12% VAT is imposed on the sale or transfer of goods and the provision of services. This includes non-personal services carried out in Guatemala. The tax is collected by way of the invoice system, where the VAT charged to customers is offset by the VAT paid on purchases, resulting in the net tax amount being paid to the government. Some transactions, such as the circulation of credit titles, are exempt from VAT. Specific categories of goods and services are exempt from this tax, including imports related to cooperatives, temporary importation, and diplomatic missions.

Guatemala imposes a stamp tax on all commercial and legal documents that are not otherwise subject to VAT or similar exemptions. The tax is generally calculated at a rate of 3% of the face value of the document or the gross value of the transaction. This tax also applies to dividend payments or credits at a rate of 5%. Exemptions from this tax include letters of credit and transactions involving international transfers of funds. In recent updates, the stamp tax on dividend payments has been repealed in favor of a 5% income tax on dividends.

Guatemala’s CIT is structured with two different regimes: a system based on earnings, which taxes at a rate of 25% on net income, and a simplified optional system that taxes 7% on gross income. The CIT return for both regimes is due by March 31. Companies paying under the system on earnings must settle the final balance upon filing the return, while the simplified optional system sees withholdings made throughout the year. Quarterly installments are required for companies taxed on earnings, and monthly payments are required for those under the simplified optional system.

In Guatemala, capital gains for both corporations and individuals are taxed at a flat rate of 10%. This applies to gains resulting from the transfer of equity rights, such as shares, and other capital-related transactions. The uniform tax rate ensures simplicity in the taxation of capital gains across various sectors, encouraging transparency and efficient tax collection.

There are no payroll taxes other than social security contributions.