• Amendments to the Income Tax Law
  • July 16, 2004 | Authors: Gerardo Anleu De Leon; Rafael Alvarado Riedel
  • Law Firm: Consortium - Rodríguez, Archila, Castellanos, Solares & Aguilar, S.C. - Guatemala City Office
  • On June 21, 2004, Congress approved amendments to 19 articles of the Income Tax Law and repealed 5 articles of the same law.

    The most relevant amendment is with respect to the tax rate for companies and other entities. As of June 1, 2004 the tax rate for companies and other entities is 5% on taxable income (gross income (-) exempt income), withheld by the buyer/user, unless the tax payer chooses the optional regime, in which the tax rate is 31% on taxable income (gross income (-) costs and expenses necessary to produce (+) non deductible costs and expenses (-) exempt income).

    The provisions amended were: article 6 (exemptions); article 7 (temporary element of the tax generating event); article 29 (Determination and form of payment of the capital gains tax); article 32 (Presumed income for professionals); article 33 (Non-domiciled transportation companies); article 36 (International news); article 37 (Net income of employees); article 37 "A" (Tax credit); article 37 "B" (Taxable income); article 38 (Taxable income in the optional regime ruled in article 72); article 39 (Non-deductible costs and expenses); article 41 (Individuals with various sources of income); article 43 (Employees); article 44 (Tax rate and regime for companies and other entities); article 44 "A" (Tax rate and regime for individuals and non-commercial entities); article 54 (Sworn statement and annexes); article 61 (Quarterly payments); article 63 (Withholdings) and article 72 (Optional regime for the payment of the tax).

    The provisions repealed were: article 24 (Losses of new companies); article 30 (Determination of the tax and form of payment); article 40 (Deduction due to the reinvestment of profits); article 58 (Formalities of the sworn statements) and article 64 (Withholdings with respect to the payment of income paid or credited).