Guatemala: More Tax Regulations Suspended

The suspension by the Constitutional Court of the application of more articles from the Tax Reform Act could cost the state more than $255 million.

Friday, February 1, 2013

The Constitutional Court has provisionally suspended two more articles of the Tax Reform Act. The first is Article 4, which includes as earned income "pensions, retirement funds and widows' pensions, in respect of an employment exercised in the country, paid or credited to any beneficiary who is resident in Guatemala", reported

According to Ricardo Barrientos, consultant to the Central American Institute for Fiscal Studies (ICEFI), the error could be solved in restoring Article 4 paragraph 68 which details the events for the payment of income tax (ISR).

In addition, the CC suspended part of Article 7 referring to the basis of the tax debit, with this the Superintendency of Tax Administration (SAT) can not compare information on average selling prices submitted by other contributors where there are cases where businesses report prices that are lower than the cost of acquisition in order to undervalue them.

According to the Finance Minister, Pavel Centeno, if the court suspended the contested sections the Treasury would not receive Q2 billion ($255 million) and in the event that the business association opposes the ISR being applied to workers with dependant relationships, it could lose out on Q4.5 billion ($574 million) in revenue.

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