Guatemala: Entrepreneurs and Government Debate Tax Act

Both sides are discussing three articles of the Tax Update Law, but so far have failed to reach an agreement.

Monday, May 6, 2013

According to Andres Castillo, president of the Chamber of Industry of Guatemala (CIG), one of the items that is causing disagreement is related to the payment of income tax (ISR) on the tips received by service companies.

The second article concerns a payment that is made up of a 10% income tax on the interest on loans taken out abroad. "The interest payments made for a loan that is taken out outside of the country generates a 10% withholding income tax, we are of the opinion that it should not be implemented, as obviously what the private sector or investor is looking for is access to credit," said the official.

The last point is about the decision made by the Ministry of Finance (Minfin) for the payment of insurance premiums to be non deductible from income tax expenses. "The current law states that you can not deduct this expense, and in the first round of negotiations they said yes, you could deduct it, now the Minfin will not accept these agreements," said Castillo.

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