Guatemala: Employment Act Traps Goods in Free Zones

Free zone companies have denounced that lack of regulation for the emerging employment law is preventing them from selling products completed before the law came into force.

Thursday, April 21, 2016

As well as the finished and ready to be marketed products there are also raw materials, machinery and other production materials which entered the free zone before the new law was passed and are now in a legal vacuum, because of the absence of regulation to establish the treatment to be given to them in the context of the new legislation.

Raul Palma, president of Agencias de Carga Intermodal, "... Attached to the Chamber of Commerce of Guatemala, said that goods that are in those precincts can not be released. The manager stated that dozens of companies, users of free zones, were left with goods that had entered 90 days before the new law was passed."

Prensalibre.com explains that "... Among the lots of goods that are on hold are finished products, raw materials, machinery and equipment or other production materials. Palma said it is creating problems for the supply of medicines to the health system. "

To solve the problem the Tax Administration announced through a statement that it has now formed a technical support table to design the regulations needed for the law.



More on this topic

Tax Benefits for Companies in Special Zones

February 2019

The regulation for Special Public Economic Development Zones, which came into effect in Guatemala on February 4, establishes fiscal incentives for companies operating under this scheme.

Among the tax benefits provided by the Law on Special Public Economic Development Zones (ZDEEP), include the exemption for 10 years of 100% of income tax, as well as the temporary suspension of taxes associated with imports.

Guatemala: Free Zones Situation Gets More Complicated

May 2016

It has been reported that one of the 17 free zones operating in the country has started the process of closing its operations entirely due to the legal uncertainty generated by the emergent employment law.

Companies operating in free zones have spent several months denouncing the serious situation they have faced since the Emergent Act for the Conservation of Employment was implemented, instead of encouraging investment and job creation, it has become a good example of how to discourage investment in a country.

Guatemala: Appeal Against Employment Act

May 2016

By filing of a lawsuit arguing unconstitutionality the union of free zones aims to once again include the 25 sectors which were excluded from receiving tax benefits under the new law.

The regulations of the controversial Emergent Act for the Conservation of Employment are still under review by the Attorney General's Office and authorities at the Ministry of Economy stated they would evaluate the possibility of modifying it, since the law is already in force and can only be revised by Congress.

Guatemalan Free Zones Press for Law

March 2010

The Free Zone Association is putting pressure on Congress to pass the bill that will regulate the sector’s activities.

This legislation would authorize Free Zone companies to sell their products to Guatemalan companies.

The association also requested the Tax Authority (SAT), to reverse a ruling which prevents them from selling some products inside Guatemala, explained Sigloxxi.com.

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