Who Gets Tax Exemptions in Guatemala?

Complaints have been made that there is not a clear and complete record of the number of companies benefiting from special tax regimes.

Tuesday, February 24, 2015

It is estimated that there are approximately 3,000 taxpayers who fall under the tax exemptions regime, either totally or partially. However, this data has not been confirmed by the Superintendency of Tax Administration, even though it had to submit its first report in 2014, according to the rule which came into effect in November 2013.

Ricardo Barrientos, senior economist at the Central Institute for Fiscal Studies, told Elperiodico.com.gt that "... The rule became effective in November 2013 meaning that the new unit should have been operating from 2014 and should have presented the first report. This report should be public for reasons of transparency and in order assess, quantify and make judgments about potential impact. "

For his part, Deputy Carlos Barreda of the National Union of Hope, added "... These are big numbers, especially when looking at those exempted under the Act of Free Zones and Maquila Companies where there is not a good level of control. On the side of the institutions, we believe that there should be more controls to prevent businesses or institutions claiming expenses in order to evade taxes that have nothing to do with religious or educational activity. "



More on this topic

Real Usefulness of Tax Incentives

May 2015

The problem with income tax exemptions is that they favor high-return projects that would probably have been made anyway.

From an IDB document entitled "The effectiveness of tax incentives: The case of export processing zones in Costa Rica, El Salvador and the Dominican Republic".

Proposal to Exempt Startups from Income Tax

April 2015

A bill put forward by Liberal MPs in Costa Rica proposes that during the first three years of operation, new companies would be exempt from paying income tax.

The proposal states that during the first year the new companies would be completely exempt from income, the second year they would be charged 25% of income tax incurred and 50% in the third year.

Guatemala: Income Tax Lowered by 3%

January 2015

In order to encourage investment in the country, starting from this fiscal year income tax paid by taxpayers registered in the regime on profits will be reduced from 28% to 25%.

According to the latest amendment of the Law on Tax Update, Decree 10-2012, the rate of income tax (ISR) applied to taxpayers from 2015 will be 25%.

Tax holidays fail to attract capital in Guatemala

June 2008

The extended exemptions from paying taxes in Guatemala haven't been effective for attracting foreign direct investment (FDI).

The 11 billion quetzales (about 1.458 billion dollars) in tax revenues that the government has decided to forego have not achieved the goal of attracting more capital.

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