Guatemala: Textile Companies Urge Investment and Employment Law

The guild is once again insisting on the urgency of the government passing the law which grants tax incentives to the maquila industry so that they can remain competitive in the global market.

Monday, March 9, 2015

Once the Investment and Employment Decree 4644 is approved, there would come into effect "... Tax incentives for the maquila industry, with terms of exemptions from income tax up to 15 years for taking up residence in the capital and 25 for those in the departments."

Antonio Malouf, president of the Association of Apparel and Textile Industry, told that "... Companies need to have incentives that keep them in the production line with other countries. In return, they could generate thousands jobs because they would be able to re-invest in their capital. "

More on this topic

Guatemala: Tax Incentives For Textile Companies and Call Centers Only

February 2016

Reforms have been made to a proposed Emerging Act for Conservation of Employment in order to maintain tax incentives only for textile sectors and call centers, leaving out other activities that were previously exempt.

Deputy Ovidio Monzon, president of the Congress Working Committee confirmed that the aim is to maintain the privileges and exemptions for textile companies and call centers.

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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