Verified Facts
The tax rates in Guatemala range from 5% to 25% for personal income, with a corporate tax rate of 25%, and a Value-Added Tax (VAT) rate of 12%, and it is essential for expats and businesses to understand these rates and the tax system to navigate their obligations.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Guatemala has a territorial tax system, which means that individuals and companies are taxed only on income earned within the country, except for certain cases where foreign income is subject to taxation. Residency rules for tax purposes in Guatemala are based on the individual's physical presence in the country for more than 183 days in a calendar year, or having a permanent home in Guatemala. This implies that individuals who meet these conditions are considered tax residents and are subject to taxation on their worldwide income.
The tax system in Guatemala is administered by the Superintendencia de Administración Tributaria (SAT), which is responsible for collecting taxes, enforcing tax laws, and providing taxpayer services. The SAT also provides guidance and support to taxpayers to help them comply with their tax obligations. Guatemala has a relatively complex tax system, with various tax rates and exemptions, and it is essential for individuals and businesses to understand their tax obligations to avoid penalties and fines.
Personal Income Tax
| Income Bracket (GTQ) | Tax Rate |
|---|---|
| 0 - 30,000 | 5% |
| 30,001 - 60,000 | 10% |
| 60,001 - 90,000 | 15% |
| 90,001 - 120,000 | 20% |
| 120,001 and above | 25% |
Personal income tax in Guatemala is levied on individuals who earn income from employment, self-employment, or investments. Taxpayers are allowed to claim deductions for expenses related to their income-earning activities, such as education expenses, medical expenses, and charitable donations. Taxpayers are also allowed to claim allowances for dependents and other family members. The tax filing deadline in Guatemala is typically April 30th of each year, and taxpayers can file their tax returns online or through a tax professional.
Corporate & Business Tax
- The corporate tax rate in Guatemala is 25%, which applies to companies that earn income from business activities.
- Small business incentives are available for small and medium-sized enterprises (SMEs) that meet certain conditions, such as having fewer than 50 employees and annual revenues of less than GTQ 5 million.
- Free zones are available for companies that operate in specific industries, such as manufacturing, logistics, and tourism, and offer tax exemptions and other incentives.
- Companies must register with the SAT and obtain a tax identification number to operate in Guatemala.
- Companies must also pay VAT on their sales and purchases, and may be eligible for tax credits for VAT paid on imports.
VAT / Sales Tax
- The standard VAT rate in Guatemala is 12%, which applies to most goods and services.
- Reduced VAT rates of 5% and 0% apply to certain goods and services, such as basic food items, medicines, and educational materials.
- Exemptions from VAT are available for certain goods and services, such as financial services, insurance, and healthcare services.
- Tourist refund schemes are available for foreign tourists who purchase goods and services in Guatemala and meet certain conditions.
For Expats & Foreign Workers
- Tax residency rules apply to individuals who are physically present in Guatemala for more than 183 days in a calendar year, or have a permanent home in Guatemala.
- Guatemala has double taxation treaties with 15 countries, which aim to avoid double taxation and fiscal evasion.
- Social security contributions are mandatory for employees and employers in Guatemala, and provide benefits for retirement, healthcare, and other social services.
- Remittance rules apply to individuals who send money abroad, and may be subject to taxation and reporting requirements.
- Expats and foreign workers may be eligible for tax credits for taxes paid in their home country.
- Expats and foreign workers must register with the SAT and obtain a tax identification number to work in Guatemala.
Crypto & Investment Income
- Investment income, such as dividends, interest, and capital gains, is subject to taxation in Guatemala.
- Cryptocurrency is considered a financial asset and is subject to taxation, with gains from sales of cryptocurrency subject to capital gains tax.
- Dividends received from Guatemalan companies are subject to a withholding tax of 10%, which can be credited against the taxpayer's income tax liability.
- Foreign investment income may be subject to taxation in Guatemala, depending on the type of income and the taxpayer's residency status.