Since November 26, the Guatemalan authorities have the power to access taxpayers' bank information for tax purposes, so they can now corroborate that the bank income of companies coincide with the payment of their taxes.
After the resolution of the Constitutional Court was published in the Diario de Centroamérica on November 25, in which the appeal of unconstitutionality filed by Escalas Mercantiles S.A., which was intended to prevent the authorities from having access to the banking information of companies and individuals, the law that empowers the Superintendence of Tax Administration (SAT) to investigate taxpayers has come into effect.
As a result of the elimination of banking secrecy in Guatemala, the business sector announces that it will be alert to "respect due process and the confidentiality of taxpayers.
One year after having suspended access to taxpayers' bank information for fiscal purposes, at the beginning of August the Constitutional Court ruled definitively and revoked the suspension, so that in the coming weeks the changes will begin to apply.
Experts and authorities believe that the ruling by the Guatemalan Constitutional Court revoking the suspension preventing access to taxpayers' bank information for fiscal purposes could be reversed with another legal action.
In recent days, the issue has become more relevant in the country, because after a year of being suspended access to banking information for tax purposes, on August 6 the Constitutional Court finally ruled, authorizing the Superintendence of Tax Administration (SAT) to review the accounts of taxpayers.
One year after the suspension of taxpayers' access to bank information for tax purposes, the Guatemalan Constitutional Court ruled definitively and revoked the suspension.
Arguing that it does not comply with the standards on transparency and exchange of information for tax purposes, the OECD evaluated Guatemala negatively and recommended working on direct access to taxpayers' banking information.
As planned, following the temporary suspension by the Constitutional Court (CC) of the article of law facilitating access to taxpayers' bank information, the Organization for Economic Cooperation and Development (OECD) decided to include Guatemala in the list of countries that do not comply with their fiscal information commitments.
In its next evaluation, the OECD could lower Guatemala's rating, because in August last year access to bank information with a court order was suspended, which could lead to an increase in the credit price.
During its last visit to Guatemala, the IMF warned that if banking secrecy is not lifted in the country, compliance with "international transparency treaties" could be undermined.
After the last visit of the International Monetary Fund (IMF) to Guatemala, the international organization warned that reversing the decrease in tax collection involves strengthening the control of large taxpayers, improving the use of tax information to reduce non-compliance, reallocating resources to risk-based audits, and reconsidering the lifting of bank secrecy for tax auditing purposes.
The article of the law in Guatemala, which facilitated access to companies bank information via a court order requested by the tax authorities, has been temporarily suspended.
The decision was taken by the Constitutional Court after a company filed an appeal of unconstitutionality.Based on the arguments put forward, the CC decided to order the provisional suspension of Article 52, which empowered the Superintendency of Tax Administration (SAT) to request that a judge order the lifting of banking secrecy of individuals or companies when there was "...reasonable doubt about the results of the processes or execution of the selective and mass inspection plans'." See "Guatemala: Bank Secrecy Now Lifted"
As part of an audit plan which will start this year and will include access to banking information, the tax authority will be verifying transactions of real estate sales.
A law has entered into force which facilitates access to individuals and companies' bank information with a court order at the request of tax authorities.
Francisco Solorzano, chief of the Superintendency of Tax Administration (SAT), noted that"... 'this tool will only be used when there is reasonable doubt about the results of the processes or execution of plans and mass selective control'."
In February a law comes into force authorizing the lifting of bank secrecy of companies and individuals with a court order at the request of tax authorities.
Banks are preparing for the entry into force of legislation in February, modifying their processes in order to respond more quickly to requests from the Superintendency of Tax Administration (SAT).
In January 2017 a rule will come into effect which allows the lifting of bank secrecy by court order at the request of the Tax Administration.
Decree 37-2016 Law to strengthen fiscal transparency and governance for the SAT was published today in Diario de Centroamerica, along with the dates for when each of the amendments adopted in the reform becomes effective.
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