Guatemala: Rules Established for Cement Tax

With the entry into force of 122-2019 Agreement, the application of the specific tax, the customs information corresponding to cement or clinker imports and the appointment of personnel to supervise storage places is regulated.

Friday, July 26, 2019

Since the 122-2019 Governmental Agreement was published in the Diario de Centro América on July 25, 2019, the regulations have become effective in the country. See full publication.

Article 1 of the Agreement explains that "... The purpose of this Regulation is to establish the application of the provisions of the Law of the Specific Tax on the Distribution of Cement, Decree number 79-2000 of the Congress of the Republic of Guatemala, and regarding the administrative collection of such tax, as well as the procedures to facilitate its collection and control."

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Article 6 stipulates that "... For purposes of control and inspection of the tax, pursuant to the provisions of Article 11 of the Law, the Tax Administration may designate competent employees in each of the storage places of cement and/or clinker manufacturers with the following functions:

a) To keep daily control of the volumes of cement withdrawn from the deposits or storage places of the manufacturers, packed in bags of forty-two point five (42.5) kilograms in weight or its equivalent when distributed in bulk;
(b) Keep a daily control of the volumes of clinker removed from manufacturers' warehouses or storage places;
c) Participate with the taxpayer in the taking of physical inventories by type of product in the deposits or storage places of the cement and/or clinker manufacturers;
d) Keep daily control of the volumes of cement brought into the country by importers on the date of its entry into the country by the corresponding customs; packed in bags of forty-two point five (42.5) kilograms in weight or its equivalent, when distributed in bulk

Abelardo Medina, senior economist at the Central American Institute of Fiscal Studies, said to that "... the implementation of the control system in the areas of production and in the warehouses of importers is positive for the control to be carried out by the fiscal entity."

According to reports from CentralAmericaData, in 2018 the main importer of hydraulic cements in Central America was Nicaragua, with $48 million, followed by Guatemala, with $44 million, El Salvador, with $25 million, Honduras, with $14 million, Panama, with $13 million and Costa Rica, with $10 million.

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More on this topic

Cement: Plant Expansion Planned

August 2019

Cemento Argos Panama plans to invest about $168 million in the construction of an industrial complex that will serve for the production of Clinker, which will be located on the property of the company's plant in the province of Colon.

Argos Panamá, S.A. presented to the Ministry of Environment the Environmental Impact Study (EIA) to develop the industrial project called "Balboa Project."

Costa Rica: Tax on Cement

March 2018

A bill that is being discussed in the Legislative Assembly proposes establishing a tax of 5% on the net sale price of imported or locally produced cement.

The bill establishes that "... the tax on cement produced within the national territory or imported, will be of five percent (5%) on the net sale price, both in the case of the national producer at the level of the production plant and for the importer at the level of the dispatch or storage site, excluding the corresponding sales or value-added tax, as well as any other tax".

More Cement Production in Guatemala

November 2016

The company Cemento Regional has started operating a plant in Escuintla, Guatemala which has capacity to produce 8,000 bags per day.

The company Cemento Regional has invested $12.2 million in the construction and commissioning of the plant, which will produce up to 8,000 bags per day and will supply the product to its three stores in the department of Guatemala.

Tax on Cement in Guatemala Confirmed

January 2015

The Constitutional Court has ruled as unfounded the suits on unconstitutionality filed by cement companies and left in place a tax of $0.65 on the distribution of each sack of cement.

The Constitutional Court decided to maintain the tax of $0.65 per sack of cement as indicated by the reform approved for the Law of Specific Tax on the Distribution of Cement under the fiscal year 2015 of the National Budget.

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