$63 million Lost in Tax Reform Challenges

The suits citing unconstitutionality presented in Guatemala against the tax reform have caused irrecoverable losses to government coffers.

Wednesday, February 20, 2013

The head of Collection at tax authority SAT said that " the reform does not only include income tax (ISR)" and noted that the Constitutional Court (CC), among other resolutions, suspended the collection of a 5% tax on the first registration of tractors (Iprima).

"According to the Central American Institute for Fiscal Studies (ICEFI), challenges citing unconstitutionality were filed against 77 articles of decrees 4-2012 (Tax Administration Strengthening Act II) and 10-2012 (Tax Update).

So far, the CC has decided to provisionally suspend four articles and declare one to be unconstitutional, so as to leave income tax payment on pensions and retirement ineffective", reported Elperiodico.com.gt.

More on this topic

Suspended Mergers and Acquisitions

April 2019

Because the Constitutional Chamber in Costa Rica admitted an action challenging the articles regulating mergers and acquisitions, the file approval processes have been temporarily suspended.

Authorities informed that since last March 19, the Commission to Promote Competition (Coprocom) refrains from approving or failing processes of companies that seek to acquire others or merge in the country.

U Turn Over Lifting of Bank Secrecy

August 2018

The article of the law in Guatemala, which facilitated access to companies bank information via a court order requested by the tax authorities, has been temporarily suspended.

The decision was taken by the Constitutional Court after a company filed an appeal of unconstitutionality. Based on the arguments put forward, the CC decided to order the provisional suspension of Article 52, which empowered the Superintendency of Tax Administration (SAT) to request that a judge order the lifting of banking secrecy of individuals or companies when there was "... reasonable doubt about the results of the processes or execution of the selective and mass inspection plans'.See "Guatemala: Bank Secrecy Now Lifted"

Guatemala: Credit Card Law Suspended

April 2016

The Superior Court has ordered the temporary cancellation due to lack of a ruling from the Bank of Guatemala, and the fact that Congress gave approval without having a majority, as stipulated by law.

The Constitutional Court (CC) has provisionally suspended the Credit Card Act, which came into force on March 8.

Guatemala: Notional VAT Calculation Annulled

March 2014

Citing unconstitutionality power has been taken away from the tax authorities to determine the basis for calculating tax owed in respect of Value Added Tax.

A paragraph in Article 7 of the Law on Value Added Tax (VAT) which was declared unconstitutional provided: "In the case that a taxpayer, within three months, reports in their declaration of turnover sales rates that are lower than at cost or production of goods, the tax authorities may determine the basis for calculating the tax owed, taking into consideration the sale price of the same product in other transactions of the same taxpayer within the same time ... unless the taxpayer can justify and demonstrate the reasons why this situation occurred and present banking and financial information proving their real income. "

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