With the reform approved by Congress, the airlines will avoid paying VAT and income tax twice.
The reforms that will come into effect in January 2021 were approved by Decree 2-2020, which received the endorsement of the Legislative on January 20.
The authorities that will assume the government in 2020 in Guatemala could evaluate options to tax temporarily some sectors, however, there would be a risk that these taxes become permanent.
In January, the first Convention of Tax Information Exchange could be signed with Australia.
In order for this convention, and others are under negotiation, to be implemented, Congress needs to approve the banking secrecy law, which would allow access to accounts relating to tax matters, a requirement of the Organization for Economic Cooperation and Development (OECD).
The measure that forced the submission of audited financial statements for the payment of income tax was limited to big enterprises.
The Guatemalan Congress approved Decree number 14-2009 which limited the types of companies that must file audited financial reports.
According to this new provision, small and medium sized businesses are not required to audit their reports, while special contributors and those inscribed under the in-bond industry, export activity and free zone schemes will have to do so.
The legislative initiative for judicial tax stability for investment and work attempts to attract investment and generate employment.
Rose M. Bolaños, in an article inPrensalibre.com, writes: "With these contracts, the state will guarantee that if the laws or legal norms are modified in the taxation environment, such as tax impositions (internal or customs) as well as perquisites or other identified contract measures, investors will have the right to continue applying the existing laws that were in force at the moment of the signing of the contract."
The Opposition and representatives on the Finance Commission are reluctant to approve the initiatives which are supposed to increase collection of taxes.
Even though the Finance Commission is yet to issue a resolution, the main forces in Congress are said to be opposed to the increase in the Solidarity Tax rate to 1.25 and to the new registration tax for new vehicles.