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Guatemalan VAT rates and VAT compliance
VAT rates in Guatemala
The standard VAT rate in Guatemala is 12%.
The current rates are:
Guatemala VAT rates | ||
| Rate | Type | Which goods or services |
| 12% | Standard | All other taxable goods and services, including imports |
| 5% | Reduced | Flat rate for small businesses |
| 0% | Zero | Exports |
| 0% | Exempt | Education; Resales of real estate; basic foodstuffs; limited range of finance services and insurance |
Guatemalan VAT compliance
Tax point rules
Guatemalan tax payers must produce invoices for all taxable transactions, including exports. These must be government-approved invoices which are processed through the Facturación Electrónica (termed ‘FACE’) system. This requires registration by the tax payer. Alternatively, for retail businesses, invoices may be issued via government-approved cash registers which log transactions against the vendor’s tax ID number.
Customers will not be able to reclaim any input VAT suffered without an eligible VAT invoice.
Invoices should include the following details:
- Name, address of the supplier
- Tax number of the supplier
- Name, address of the customer
- Date of supply
- Unique invoice number
- Description of the goods or services provided
- Foreign currency translations into GTQ
- VAT rate, amount charged and gross amount of the invoice
Credit notes may be issued. Exports require VAT invoices, too, which should be supported by customs declaration documentation or bills of lading to support the nil-rating for VAT. There is no provision for simplified invoices.
There is a cash settlement limit on invoices of GTQ30,000. Consideration above this must be made by electronic bank payment.
Time of supply rules
The date when VAT is due in Guatemala is known as the time of supply or tax point. For goods, it is the earlier of the cash payment or the issuance of a VAT invoice. For services, it is the issuance of the receipt, or cash payment if no receipt. For continuing supplies of services, the instalment payments are the time of supply.
VAT on imports is due at customs, and goods will not be released until this has been settled.
