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The Pros and Cons of the Tax Reform in Guatemala

The bill provides that no amounts may be deducted from VAT on purchases, and increases the tax base for the payment of income tax.

Thursday, January 26, 2012

The Guatemalan government’s tax reform law is ready, and contains several new points: employees ability to deduct VAT from annual purchases from their taxes has been eliminated, the tax base has been increased, and the road tax for vehicles has been doubled.

The Finance Minister Pavel Centeno, said the initiative also provides that those with annual revenues of Q5 billion ($640) or less do not have to pay income tax.

"The rates for the general scheme will be 6% next year and 7% in 2014, the 31% scheme will be lowered to to 28% in 2013 and 25% in 2014, but it is anticipated that there will be a tightening of the criteria that allows companies to discount their expenses against income tax", reported Prensalibre.com.

Source: prensalibre.com