Banking Secrecy: Controversy Comes Back

During its last visit to Guatemala, the IMF warned that if banking secrecy is not lifted in the country, compliance with "international transparency treaties" could be undermined.

Friday, May 10, 2019

After the last visit of the International Monetary Fund (IMF) to Guatemala, the international organization warned that reversing the decrease in tax collection involves strengthening the control of large taxpayers, improving the use of tax information to reduce non-compliance, reallocating resources to risk-based audits, and reconsidering the lifting of bank secrecy for tax auditing purposes.

With respect to the lifting of bank secrecy, the current suspension, in addition to weakening revenue, could undermine Guatemala's compliance with international transparency treaties, the IMF explained in its report.

See "IMF with Positive Outlook for Guatemala"

Regarding the IMF recommendation, representatives of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif) have spoken out against it.

Juan Carlos Tefel, president of the Cacif, explained to Prensalibre.com that "... he disagrees with the position of the IMF, and indicated that what is needed is to establish a process to access the bank accounts and which must be fulfilled . 'What you need is a due process to access the bank accounts which must be fulfilled.If there is an investigation and you need access to bank accounts of some person, with a judge order you can achieve'."

Tefel added that "... We do not understand what the Monetary Fund is referring to, saying that in Guatemala there is banking secrecy, only in two countries of the world there is the banking secrecy that is Liechtenstein and Switzerland." Here the accounts are one-person, with names and surnames which maybe there is a procedural error or a misunderstanding of the procedure".

The last thing that was reported on the subject in the country was that in August 2018 the article of the law that facilitated access to banking information of companies at the request of the tax authorities was temporarily suspended.

See "Reverse to bank secrecy survey"

Therefore, the Superintendency of Tax Administration can not investigate taxpayers, without substantiating before the Public Ministry the banking information requirements of legal (business) or individual taxpayers.

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More on this topic

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.

Tax Information: Pending Matter Involved in Controversy

August 2019

Arguing that it does not comply with the standards on transparency and exchange of information for tax purposes, the OECD evaluated Guatemala negatively and recommended working on direct access to taxpayers' banking information.

As planned, following the temporary suspension by the Constitutional Court (CC) of the article of law facilitating access to taxpayers' bank information, the Organization for Economic Cooperation and Development (OECD) decided to include Guatemala in the list of countries that do not comply with their fiscal information commitments.

Banking Confidentiality and International Perception

June 2019

In its next evaluation, the OECD could lower Guatemala's rating, because in August last year access to bank information with a court order was suspended, which could lead to an increase in the credit price.

In August 2018, the article of the law that in Guatemala facilitated access to banking information of companies with a court order at the request of the tax authorities was temporarily suspended.

Guatemala: Bank Secrecy Now Lifted

February 2017

A law has entered into force which facilitates access to individuals and companies' bank information with a court order at the request of tax authorities.

Francisco Solorzano, chief of the Superintendency of Tax Administration (SAT), noted that "...

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