Changes to Income Tax in Guatemala

Although rates of income tax for employees have decreased, so have deductions and exemptions, meaning that ultimately the taxpayer will pay more than before.

Monday, December 3, 2012

Prensalibre.com reports that "the rates still in effect in 2012 are those of 15%, 20%, 25% and 31%, which will be charged up to 2012, and the new rates in 2013 are 5% and 7%. "

"Medical expenses and certain insurance or pension funds can no longer be deducted. Moreover, even if the worker has the right to file a return of value added tax (VAT) to reduce payment of income tax, this will not have the same affect, because it is no longer taken as a direct reduction of the tax but as a deductible expense. Starting in 2013, family expenses can not be included only personal ones. "

"If the taxpayer has more than one job, he must report to the employer who gives the greatest income, and what he gets in his second job."

"For employers it is now a requirement to withhold income tax from the employee, according to projected annual income, which must be from the employee’s income and deducting only the minimum wage (Q48 thousand), contributions to IGSS, IPM and assistance fund. Otherwise for the employer paying wages will not be recognized as a deductible expense. "

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