Guatemala Cross-Border Tax Guide 2026

Overview — Cross-Border Taxation in Guatemala

Guatemala's cross-border tax rules are governed by the ISR Law (Decree 10-2012), the Tax Code (Código Tributario), and the transfer pricing regulations. The SAT has been building its international tax capacity, including participation in OECD BEPS initiatives. The territorial tax system is a critical feature — non-residents are taxed only on Guatemala-source income, and residents are taxed only on Guatemala-source income. Multinational enterprises must comply with transfer pricing documentation, thin capitalisation rules, and withholding tax obligations.

Transfer Pricing — OECD Guidelines

Guatemala's transfer pricing rules (introduced in 2012) follow the OECD Transfer Pricing Guidelines. Transactions between related parties must be priced at arm's length. Related parties include companies under common control, parent-subsidiary relationships, and individuals with significant influence. Documentation requirements include a local file for transactions exceeding thresholds. Acceptable transfer pricing methods include the Comparable Uncontrolled Price (CUP) method, Cost Plus method, Resale Price method, Transactional Net Margin Method (TNMM), and Profit Split method. Advance Pricing Agreements (APAs) are available. Penalties for non-compliance range from 20% to 100% of the tax adjustment plus interest.

Thin Capitalisation

Guatemala's thin capitalisation rules limit interest deductions on related-party debt. The maximum allowable debt-to-equity ratio is 3:1. Interest on debt exceeding this ratio is disallowed as a deduction. The rules apply to related-party debt, including loans from foreign parent companies and sister companies. Arm's length interest rates must be applied to related-party loans. The SAT may also apply general anti-avoidance rules where debt arrangements lack commercial substance.

Withholding Taxes to Non-Residents

Payments to non-residents from Guatemala-source income are subject to withholding tax at the following standard rates (treaty rates may apply):

• Dividends — 5% (reduced to 0–5% under some DTTs)
• Interest — 10% (reduced under DTTs)
• Royalties — 15% (reduced under DTTs)
• Technical services & fees — 15% (if sourced in Guatemala)
• Branch profits remittance — 5% (same as dividend rate)
• Rent (real estate) — 10% (non-resident landlords)

The person making the payment must withhold the tax and remit it to SAT. Treaty relief requires the non-resident to provide a Certificate of Tax Residency.

Controlled Foreign Company (CFC) Rules

Guatemala's CFC rules are limited compared to OECD standards. The territorial system inherently limits the impact of CFC rules since foreign passive income of a Guatemalan resident is generally not taxable. However, where a Guatemalan resident controls a foreign entity that earns Guatemala-source income (e.g., through a Guatemalan permanent establishment), the income may be attributed. The SAT has been strengthening its international tax enforcement but comprehensive CFC legislation has not been enacted as of 2026.

Solidarity Tax (ISO)

Guatemala imposes an alternative minimum tax called the Impuesto de Solidaridad (ISO) at 1% on gross assets or 1% on gross revenue, whichever is higher. The ISO is creditable against regular ISR. Companies pay the higher of regular ISR or ISO quarterly. The ISO was introduced to ensure a minimum tax contribution from all businesses and to combat tax evasion through underreporting of profits.

FAQs

Do I need to register for tax in Guatemala as a non-resident investor?

Non-residents earning Guatemala-source income subject to final withholding tax generally do not need to register. However, a non-resident with a permanent establishment must register and file tax returns.

How do I claim a refund of excess WHT?

A non-resident may claim a refund if WHT was deducted at the full statutory rate when a reduced treaty rate should have applied. Submit the claim to SAT with supporting documents.

Does Guatemala have a General Anti-Avoidance Rule (GAAR)?

Yes, the Tax Code includes a GAAR that allows SAT to recharacterise transactions entered into for tax avoidance purposes.

Disclaimer

This guide provides general information about Guatemalan cross-border taxation for the 2026 tax year. Tax laws and treaty provisions may change. Always consult with a qualified Guatemalan international tax advisor or SAT for advice specific to your situation. InvestmentKit does not provide tax advice.