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Incorporated businesses or private individuals are liable to charge VAT on taxable transactions. Registration is carried out at the time of incorporation of the business, and a tax identification number is provided with the company incorporation number.
Small businesses, with annual taxable supplies below GTQ150,000, may instead opt for the simplified VAT regime. This entitles them to charge a flat 5% on their turnover, without the right to deduct any input VAT incurred. They are required to report monthly on their sales and VAT due.
There is no concept of group VAT registrations whereby connected companies under related control may opt for a single VAT registration to eliminate VAT payments on inter-group transactions. There is no option to voluntarily register since the VAT registration threshold is nil, and registration takes place at incorporation.
To help reduce VAT fraud in Guatemala, certain recipients of taxable services are obliged to withhold VAT due and remit directly to the tax office.
Withholding agents include:
The percentage of VAT to be withheld varies depending on the type of customs and taxable supply.
Non-residents providing occasional supplies may also avoid a local VAT registration by having resident customers withhold VAT on their invoices.
The Guatemalan VAT registration threshold is nil; businesses must therefore register before providing their first taxable sale of goods or services. Registration should take place at incorporation for companies.
Foreign businesses without a fixed establishment in Guatemala are obliged to register for VAT if they provide taxable supplies. They must submit the following documentation to receive a VAT number:
Non-residents are required to appoint a local fiscal representative, responsible for ensuring proper bookkeeping, reporting and payment of VAT.
+44 (0)1273 022400