Taxes in Guatemala follow a territorial principle: only income generated inside the country is taxable, whether the earner is a Guatemalan citizen, a foreign resident, or an overseas company. Income earned abroad is not taxed in Guatemala regardless of your residency status. The Superintendencia de Administración Tributaria (SAT) runs the national system, municipalities collect the property tax, and Guatemala has no tax treaties in force with any country, so there are no bilateral agreements to reduce or eliminate double taxation on cross-border income.1PwC Worldwide Tax Summaries. Guatemala – Individual – Foreign Tax Relief and Tax Treaties
Personal Income Tax
The Impuesto Sobre la Renta (ISR) applies to salary, wages, rental income, and other earnings sourced within Guatemala. You are a tax resident if you spend 183 days or more in the country during a calendar year, or if your principal place of business is located there.2PwC Worldwide Tax Summaries. Guatemala – Individual – Residence Residents and non-residents both pay ISR on Guatemalan-source income, but residents file under a progressive schedule while non-residents generally have tax withheld at the source.
Employment income for residents is taxed at two progressive rates after deductions:
- 5% on annual taxable income up to Q300,000
- 7% on the portion above Q300,000
Before those rates apply, you subtract a flat standard deduction of Q48,000 along with social security contributions (4.83% of salary), life insurance premiums, and qualifying charitable donations.3PwC Worldwide Tax Summaries. Guatemala – Individual – Deductions The effective rate on lower incomes ends up quite modest once those deductions are stacked.
Corporate Income Tax
Every business in Guatemala chooses between two income tax regimes. The choice determines the rate, the recordkeeping burden, and whether operating expenses reduce the tax base at all.
General Regime
A flat 25% tax applies to net profit after deducting allowable costs and expenses.4PwC Worldwide Tax Summaries. Guatemala – Corporate – Taxes on Corporate Income Tax is paid quarterly with an annual reconciliation. It requires thorough accounting to substantiate deductions but rewards businesses that carry real operating costs.
Optional Simplified Regime
The simplified regime taxes gross revenue with no expense deductions, on a monthly basis:
- 5% on the first Q30,000 of monthly gross revenue
- 7% on everything above Q30,000
Payment is monthly, either through customer withholding or direct payment to SAT. Businesses with thin margins usually prefer the general regime because deducting costs at 25% yields lower tax than paying 5%–7% on total revenue. Businesses with low overhead often find the simplified regime cheaper and easier to manage.
Solidarity Tax (ISO)
The Impuesto de Solidaridad is a minimum tax on businesses. SAT calculates it at 1% of either the company’s net assets or its gross revenue, whichever is higher, and it is paid quarterly based on the opening balance sheet for each fiscal period.5PwC Worldwide Tax Summaries. Guatemala – Corporate – Other Taxes
ISO amounts paid can be credited against corporate income tax, so most companies do not pay both in full. If the ISO exceeds the income tax for the period, however, the difference is not refunded. The result is that every profitable business pays at least 1% of the larger of its two bases, even if deductions would otherwise push income tax close to zero.
Value Added Tax (IVA)
The Impuesto al Valor Agregado is Guatemala’s main consumption tax, applied at a flat 12% to the sale of goods, the provision of services, and imports.5PwC Worldwide Tax Summaries. Guatemala – Corporate – Other Taxes Businesses collect IVA on their sales, credit the IVA paid on their purchases, and remit the net to SAT.
Exports of goods and services carry a zero rate. Financial services provided by banks are exempt, as are asset transfers in mergers, certain insurance transactions, and educational services. Small-value sales of basic food items (meat, fish, fresh produce, and grains) in municipal and cantonal markets are exempt when the transaction does not exceed Q100; that exemption does not extend to supermarket grocery purchases, which still carry the full 12%.
Withholding on Non-Residents
Non-resident individuals and companies without a permanent establishment in Guatemala pay tax on Guatemalan-source income through withholding at the payer. The headline rates are:
- Dividends: 5%
- Interest: 10%
- Royalties: 15%
These rates come from current international tax references.6PwC Worldwide Tax Summaries. Withholding Tax (WHT) Rates Because Guatemala has no tax treaties, there is no route to a reduced treaty rate. Whether you can offset Guatemalan withholding against tax at home depends entirely on your own country’s foreign tax credit rules.
Property Tax (IUSI)
The Impuesto Único Sobre Inmuebles is a municipal tax on land and permanent structures, calculated on the property’s registered fiscal value. After buying property, you have 15 days to notify the municipal cadastral office and update the record. Rates are progressive:
- Up to Q2,000: exempt
- Q2,001 to Q20,000: 2 per thousand (0.2%)
- Q20,001 to Q70,000: 6 per thousand (0.6%)
- Above Q70,000: 9 per thousand (0.9%)
A property with a registered value of Q1,000,000 would owe roughly Q9,000 per year.7PwC Worldwide Tax Summaries. Guatemala – Individual – Other Taxes Fiscal values often lag market values because revaluations tend to happen only when property changes hands, so long-held real estate can carry a low base. That also means a purchase can trigger a noticeable jump in the assessed value.
Stamp Tax, Capital Gains, and Vehicle Tax
Stamp Tax
The Impuesto de Timbres Fiscales applies at 3% to documents covering commercial and legal transactions, calculated on the face value of the document or the gross value of the transaction.5PwC Worldwide Tax Summaries. Guatemala – Corporate – Other Taxes It shows up most often in real estate resales: the first registered sale of a property carries the 12% IVA, and subsequent resales fall under the 3% stamp tax instead. Letters of credit and certain international fund transfers are generally exempt. The stamp tax formerly applied to dividend payments; that provision was repealed and replaced with a 5% income tax on dividends.
Capital Gains
Guatemalan-source capital gains are taxed at a flat 10%.8PwC Worldwide Tax Summaries. Guatemala – Individual – Income Determination It covers profits from selling real estate, securities, and other assets, as long as the sale is not part of your regular business activity. If you trade those assets as a business, the profit falls under your chosen ISR regime instead. Capital gains from assets located outside Guatemala are not taxed.
Vehicle Circulation Tax
The annual Impuesto Sobre Circulación de Vehículos applies to owners of land, sea, and air vehicles. SAT sets the amount using published valuation tables based on vehicle type, brand, model, and age. Payment is due by July 31 each year, with no extensions.9SAT Portal. SAT Portal – Vehicle Topics Missing the deadline flags the vehicle as delinquent, which creates problems during registration renewals and roadside inspections.
Social Security Contributions
Employees pay 4.83% of monthly salary into the social security system (IGSS), and employers pay 12.67% of monthly payroll.7PwC Worldwide Tax Summaries. Guatemala – Individual – Other Taxes Employers withhold the employee share and remit both portions to IGSS. The employee’s 4.83% is deductible when calculating personal ISR, which reduces taxable income automatically.3PwC Worldwide Tax Summaries. Guatemala – Individual – Deductions
Filing Deadlines and Penalties
The fiscal year matches the calendar year. Annual income tax returns under the general regime are due within the first three months of the following year, which puts the effective deadline at March 31 for calendar-year taxpayers.10SAT Portal. SAT Portal – Tax Compliance Simplified-regime businesses file a separate annual informative return within the same three-month window. IVA returns are filed monthly, and general-regime income tax is paid in quarterly installments.
SAT can impose fines of up to 100% of unpaid tax, plus interest on the outstanding balance. Given that the penalty can effectively double the bill, staying current on monthly, quarterly, and annual filings is the most direct way to keep costs down. Businesses classified as “special taxpayers” or IVA withholding agents carry extra reporting duties and face closer SAT scrutiny.