Guatemala: Taxes and Costs

Country Rating  »

Home ›  Latin America ›  Guatemala ›  Taxes and Costs

Taxes are very high in Guatemala

INDIVIDUAL TAXATION

The Guatemalan taxation system has historically been characterized by a low capacity to collect, partly due to a strong anti-fiscal culture arising from the lack of credibility of government institutions, an informal or underground economy and a low capability of the tax collection institutions.

Nonresidents are taxed on their Guatemalan-sourced income. Married couples are taxed separately.

INCOME TAX

Withholding taxes are applicable to nonresidents. Nonresidents earning income from renting out Guatemalan properties are taxed at 31% of net income.

Taxable income is computed by deducting income-generating expenses from the gross rent. The deductions must be supported by corresponding legal documentation.

Depreciation is also deductible. The following depreciation rates are allowed:

Non-deductible costs and expenses are costs and expenses not supported by corresponding legal documentation, the value of permanent improvements made to fixed assets, depreciation.

Non-residents can avail of the following personal deductions:

• a total of GTQ36,000 (US$4,691) a year without need to prove anything
• quotas paid to Bar Associations, bond premiums, social security contribution
• alimony established by a Family Court
• donations not larger than GTQ 500,000 (US$65,155)

VALUE ADDED TAX (impuesto al valor agregado)

VAT is levied at a uniform rate of 12% and applies (among others) to the sale or rental of real estate.

Leasing Real Estate

VAT imposed on leasing properties is based on the gross rent plus any financing charge.

VAT withheld by businesses and owed to the government may be offset in equal amount by the tax paid in other transactions. Application for reimbursement of any remaining credit may be made to the Superintendencia de Administración Tributaria.

Selling Real Estate

VAT is imposed on the selling of immovable properties in Guatemala and the taxable amount is the selling price.

CAPITAL GAINS TAX

Capital gains earned by nonresidents from selling Guatemalan property are subject to a flat 31% withholding tax. The taxable gain is computed by deducting the acquisition costs and improvement costs from the selling price or current market value of the property.

PROPERTY TAX

Real Tax or Property Tax (impuesto unico sobre inmuebles)

This tax is collected by the local government (departments, municipalities) as an annual property tax applicable to all real estate in Guatemala. The property taxes are levied on the cadastral value of the property, as determined by the tax authorities.

Guatemala - more data and information

• Guide to buying houses and registering property sales in Guatemala

Your Comments

Post a comment