Guatemala: Maquilas to be Charged Income Tax

In the absence of a law to renew tax incentives, some 1,223 companies in the maquila sector and the free zone will have to pay income tax in 2016.

Wednesday, January 13, 2016

After the lapse on December 31 of tax benefits for companies working under these special arrangements, the Superintendency of Tax Administration of Guatemala will officially begin charging ISR, a measure that will bring in revenue to the state in the order of $258.4 million (a Q2 billion).

Prensalibre.com reports that "... although the law is called ´the Maquila Act´, along with the free zone, it provides benefits to various industries such as mining, bakeries and shoe stores, which has drawn criticism from several representatives, who say that they are taking advantage by including other sectors. "



More on this topic

Guatemala: Exports from Processing Zones Down 4%

February 2017

In 2016 exports from the free zone regime fell by 4% compared to 2015, and those from companies covered under the maquila incentive law, fell by 6%.

The negative results in foreign sales of companies operating under one of the two incentive schemes is due in part to the departure of several companies from the free zone regime, having been affected by the Emergent Employment Act.

Guatemala: Call to Boycot Income Tax

January 2016

With the hope of getting exemptions reinstated, maquila sector union representatives are calling on a thousand companies to avoid the payment of the income tax until the exemptions are reactivated.

The Superintendency of Tax Administration (SAT) confirmed in early January that both administrators and users of free zones and maquilas (by decree 65-89 and 29-89 respectively) must pay income tax (ISR) for the fiscal year 2016.

Honduras: Proposed Tax for Maquilas

February 2012

An initiative has been launched to levy a tax on the sales of clothes by maquilas in the domestic market in order to prevent alleged unfair competition.

Congressman Renan Inestroza is the author of the proposal. He argues that since non-Honduran maquila companies are authorized to sell 20% of their export product that has quality failures in the domestic market, an unfair situation has been created.

Tax Exemptions to be Replaced with Incentives

February 2012

In Guatemala, in order to meet WTO requirements, exemptions will be eliminated gradually, and instead economic benefits will be awarded.

The exemptions are to be applied to sectors such as maquila industry, through Law 29-89, and the Free Zones Act.

"In order to meet a requirement of the WTO, the exemptions will be eliminated gradually, but economic benefits will be granted in order to keep the country attractive for investments", said Pavel Centeno, Minister of Finance.

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