Guatemala: VAT Exemption on Electricity Bill

Companies operating under the Law for the Promotion of Export Activities and Maquilas will be able to deduct the VAT paid on electricity.

Wednesday, July 6, 2016

By presenting a certifying document to the Superintendency of Tax Administration (SAT) exporters will be exempted from paying VAT on their electricity bill, since it is a "... tax benefit according to decrees 29-89 and 19-2016  explained the lawyer Rodrigo Barillas in an activity organized by Agexport. reports that "...According to Carolina Campos, manager of the Union of Large Users, the document presented to the SAT is used in processes in which energy is generated in the country and is considered a raw material for production on the part of the company. Those selling energy must accept the proof of purchase of the input to which tax benefits are applied, which companies are entitled to according to decrees 29-89 and 19-2016."

Abelardo Medina, an economist at the ICEFI, explained that   "... the evidence of acquisition of inputs is a tool used by the SAT to verify purchases made by exporting companies. With the reforms in Decree 19-2016 this control has been improved, exempting purchases in the local market used by companies operating under the 29-89 scheme and now certificates of exemption have to be issued which have electronic controls."

More on this topic

Tax Reform and Free Zones

September 2018

Entrepreneurs in Costa Rica are warning of the negative impact of not maintaining, in the new law of public finances, the VAT exemption on local purchases of goods and services carried out by free zone companies.

The Association of Free Trade Zone Companies of Costa Rica (Azofras) points out that in the bill to strengthen public finances that is being discussed in the Assembly, motion 302 was not revised, a motion which aims to keep the VAT exemption on the local purchases of goods and services carried out by free zone companies, both to be incorporated into export products and for their operations. Currently the sales tax exemption applies. 

Exporters to Deduct VAT on Purchases from VAT on Sales

July 2015

In El Salvador exporters will be allowed to deduct from the total to be paid for withholding tax for VAT, the amount that has been paid for the same concept for raw material purchases abroad.

From a statement issued by the Legislative Assembly of El Salvador:

During the plenary session on Thursday, approval was given, with 70 votes, to an amendment to article 76 of the Law on Tax on the Transfer of Movable Property and the Provision of Services (VAT), to achieve a more effective procedure in relation to the regulations for reimbursement or refund of tax credits to exporters without affecting the ability to exercise control that each State has.

Tax Exemptions in Guatemala

July 2012

Making the distinction between the classifications of exemptions is necessary because associations, foundations and other entities are required to be fiscally solvent in order to keep their status as an exempt entity.

From an Article by Oscar Chile Monroy:

There are several classifications for tax exemptions.

Guatemala: Memo and March 2011 Tax Calendar

March 2011

Items to be taken into account to carry out an annual transaction study between related companies.

Currently, several countries have existing legislation on transfer prices. The legislation regulates the elements that should be available to carry out an annual survey of transactions between related companies, as well as indicators serving as basis for determining if transfer pricing between related parties are within legal parameters.

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