Tax Incentives for Agriculture

In order for Guatemalan producers to compete under the same conditions as neighboring countries, the government is preparing a bill that seeks to exempt agricultural inputs from VAT.

Friday, January 31, 2020

The initiative, known as the "Fiscal Equity Law", is being prepared by the Ministry of Agriculture, Livestock and Food (Maga), because, according to the institution's top official, other Central American countries do not charge value-added tax (VAT) on agricultural inputs.

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"... The aim is, for example, to bring Guatemala into line with Honduran law 119-2016, which establishes this exemption for the neighboring country," said Oscar Bonilla, the agriculture minister.

Bonilla explained to Prensalibre.com that "... This would include machinery, tractors, pumps, pesticides, agricultural implements and other inputs. For this purpose, the initiative is expected to be transferred to Congress in the coming weeks, and will be coordinated with the General Secretariat of the Presidency for the respective procedure."

For directors of the Chamber of Agriculture, if this proposal is approved, Guatemalan production will be more competitive and investment in the agricultural sector could be boosted.

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More on this topic

Call to Veto Special Tax Regime for Agriculture

September 2019

The Guatemalan Chamber of Commerce opposes the special tax scheme for agricultural activity approved by Congress, arguing that it is unconstitutional and violates the principles of tax equity.

The new fiscal regime for agriculture, approved last September 24 by the deputies of the Congress of the Republic, has been surrounded by controversy, as from the beginning the chambers of industry and commerce expressed their opposition.

Tax Benefits: Agricultural Producers Registry

September 2019

On September 2, Costa Rica began the registration of individuals and agricultural producers who wish to opt for the benefits contemplated in the new tax regulations.

The term began on Monday, September 2 and ends on January 31, 2020, and for registration interested parties must submit their physical or legal identity card, and literal certification of the property, informed the Ministry of Agriculture and Livestock (MAG).

Honduras: Tax Incentive for Agriculture Now In Effect

October 2016

Raw materials, veterinary pharmaceuticals, pesticides, seeds and live animals are exempt from the 15% sales tax.

The current document sets out eight categories of items from raw materials, supplies, equipment and machinery used to produce them. The different classifications contain 323 tariff items for tax free products. 

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.

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