Bank Secrecy: Can the Court's Decision Be Reversed?

Experts and authorities believe that the ruling by the Guatemalan Constitutional Court revoking the suspension preventing access to taxpayers' bank information for fiscal purposes could be reversed with another legal action.

Thursday, August 8, 2019

In recent days, the issue has become more relevant in the country, because after a year of being suspended access to banking information for tax purposes, on August 6 the Constitutional Court finally ruled, authorizing the Superintendence of Tax Administration (SAT) to review the accounts of taxpayers.

Abel Cruz Calderon, superintendent of SAT, explained to that "... once the measure that reactivates requests for banking information for auditing purposes becomes effective, a similar inconsistency can be raised again. We are waiting for the sentence to be published in the Diario de Centro América in order to begin the plans, but we still have to wait if it is not acted upon again with an injunction or another objection.

For Miler Estrada, auditor and specialist in tax law, "... the appeal of unconstitutionality was badly raised and the judges of the CC did not go to the bottom of the matter: the protection of the taxpayer. The CC's resolution did not address the fact that investigations are 'done in secret from the taxpayer' without taking into account the principles governing administrative and tax law that guarantee the right to defense and due process."

Regarding the form of application of the rule, Juan Francisco Solórzano, former Superintendent, stated that "... it does not mean that the SAT may have bank access to "all" taxpayers, on the contrary, it must be based on an annual plan and justify before a competent judge the reason why it requests access to this type of information."

See articles "Can another action of unconstitutionality (again) block SAT access to bank accounts?" and "What does the SAT unit that will have access to bank accounts do?" (in Spanish).

More on this topic

Removal of Bank Secrecy Applies

November 2019

Since November 26, the Guatemalan authorities have the power to access taxpayers' bank information for tax purposes, so they can now corroborate that the bank income of companies coincide with the payment of their taxes.

After the resolution of the Constitutional Court was published in the Diario de Centroamérica on November 25, in which the appeal of unconstitutionality filed by Escalas Mercantiles S.A., which was intended to prevent the authorities from having access to the banking information of companies and individuals, the law that empowers the Superintendence of Tax Administration (SAT) to investigate taxpayers has come into effect.

Bank Secrecy: What Concerns Businessmen?

September 2019

As a result of the elimination of banking secrecy in Guatemala, the business sector announces that it will be alert to "respect due process and the confidentiality of taxpayers.

One year after having suspended access to taxpayers' bank information for fiscal purposes, at the beginning of August the Constitutional Court ruled definitively and revoked the suspension, so that in the coming weeks the changes will begin to apply.

Court Decision Eliminates Bank Secrecy

August 2019

One year after the suspension of taxpayers' access to bank information for tax purposes, the Guatemalan Constitutional Court ruled definitively and revoked the suspension.

The issue had been on hold since August 2018, when the country's highest court temporarily suspended the article of the law that in Guatemala granted companies access to banking information with a court order at the request of the tax authorities.

Guatemala: Fiscal Transparency and Banking Secrecy

May 2016

The tax authority is insisting on the impossibility of complying with information exchange agreements with other countries if banking secrecy is not eliminated for tax purposes.

Amid the discussion in Congress of the draft Law for Strengthening Fiscal Transparency and Governance of the Tax Administration, the superintendent Solórzano Foppa reemphasized the need to allow access to taxpayers' tax information for tax purposes by means of authorization given by a judge. He also announced that preparations are being made for "... a new control plan with which an attempt will be made to recover the power to collect taxes on income earned outside of Guatemala that are transferred to offshore accounts."

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