Guatemala: Tax on Tips Keeps Standing

The measure to collect value added tax on tips is being maintained despite the resistance shown by the corporate sector.

Tuesday, May 14, 2013

"We have reached an agreement with employers and the three articles in which they disagreed have been excluded from the proposed amendments to the Tax Update," said Pavel Centeno, Finance Minister (Minfin).

According to Andres Castillo, president of the Chamber of Industry of Guatemala (CIG), they only signed up to the Value Added Tax (VAT) on tips in order not to hinder the discussion of other items on which agreements have already been made.

"It is not that we accept it, but it is preferable to send 25 items to be modified than to send none," he said.

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More on this topic

Guatemala Charges VAT on Tips

March 2014

The Tax Authority has confirmed that these bonuses must be added to bills.

Under a proposed amendment to the Tax Update law, tips must be taken into account when calculating Value Added Tax (IVA by its initials in Spanish).

The Tax Authority has determined that "Taxpayers who give bills for sales or services must include the amounts paid to them by their clients including tips.

Nicaragua: Tips Should Be Voluntary

August 2013

The business community believes that tips in restaurants and hotels should be voluntary and not included on bills.

The president of the Superior Council of Private Enterprise (Cosep), Joseph Adam Aguerri and Eduardo Fonseca, executive director of the Chamber of Commerce of Nicaragua (Caconic) agree on the matter.

Costa Rica: Tax Removed from Tips

December 2012

A law passed by Congress states that income from tips should not be considered as part of a salary, and therefore should not be subject to taxes.

An interpretive ruling of the Constitutional Chamber of Costa Rica had endorsed the view of the authorities of the Social Security Department, which includes tips in salaries on which social security contributions are calculated, both those paid by the employee and the employer.

Costa Rica: "Mandatory" Tip Increases Costs

May 2011

The Chamber of Hotels & Restaurants is continuing its attempt to eliminate the mandatory gratuity on bills.

The tax, equivalent to 10% of the invoiced amount for food and accommodation services in restaurants and hotels and referred to as a tip, is income that should be distributed among employees. However, many operators do not pass the money on to their staff.

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