Guatemala - Taxation



The corporate income tax rate in Guatemala is 31%. Resident mercantile and farm enterprises must also pay on a quarterly basis an annual company tax calculated as either 3.5% of total assets or 2.25% of gross annual income. The company tax is credited against tax liability in the following year, and if the company does not generate taxable income in the following year, then the annual company tax is treated as a minimum payment of income tax. An industrial development law provides tax exemptions for new industries. There is also a 3.5% tax on all foreign exchange transactions. Only income earned from Guatemalan sources is taxed. Capital gains are taxed at a flat rate of 15%, and dividends at 12.5%.

The progressive personal income tax schedule has four brackets: 15% on the first increment of taxable income to about $8,440; 20% on the next increment to about $23,360; 25% on the next increment to $38,300, and 31% on taxable income above $38,300. There a fixed deduction of about $4,670 (36,000 Quetzal) annual income plus various deductions for life insurance premium, medical expenses, living allowance, pension premiums, etc. Inheritance and gift taxes range from 15 to 25%, and property taxes from 0 to 0.9%. Stamp duties are 3%.

Guatemala's main indirect tax in its value-added tax (VAT) raised from 10% to 12% as of 8 January 2001. Excise taxes are levied on beverages, cigars, tobacco, gasoline, vehicles, and airline tickets.

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