Guatemala Personal Income Tax Guide 2026

Overview — Superintendencia de Administración Tributaria (SAT)

The SAT is Guatemala's tax authority responsible for administering all tax laws including ISR, IVA (VAT), and customs duties. Guatemala operates a territorial tax system: only income sourced in Guatemala is subject to ISR. Foreign-source income earned by residents is generally not taxable. This makes Guatemala an attractive jurisdiction for internationally mobile individuals. Residency is determined by physical presence of 183 days or more in a calendar year. Employees have ISR withheld at source under the withholding system. Self-employed individuals and businesses file quarterly or annual returns directly with SAT.

ISR Tax Brackets 2026 — Annual Rates

Guatemala uses a progressive annual bracket system with 6 bands and a top marginal rate of 31%. For 2026, the annual ISR brackets are:

• 5% — on the first GTQ 60,000 (after exemption)
• 10% — on GTQ 60,001 to GTQ 120,000
• 15% — on GTQ 120,001 to GTQ 240,000
• 20% — on GTQ 240,001 to GTQ 480,000
• 25% — on GTQ 480,001 to GTQ 800,000
• 31% — on annual income above GTQ 800,000

Effective tax rates are modest for lower incomes due to the GTQ 60,000 personal exemption. A taxpayer earning GTQ 300,000/year pays approximately GTQ 31,500 in ISR — an effective rate of ~10.5%.

Personal Exemption — GTQ 60,000

All resident individuals benefit from an annual personal exemption of GTQ 60,000. This means the first GTQ 60,000 of Guatemala-source income is completely tax-free. The exemption is applied automatically in the progressive tax calculation. There is no separate filing required to claim it — it is built into the tax brackets. Additional deductions available include mortgage interest on primary residences (up to GTQ 30,000/year), medical expenses, and educational expenses for dependants.

Withholding System

Employers must register for ISR withholding with SAT and deduct tax monthly from employee salaries. The employer calculates monthly ISR on gross salary, applies the personal exemption proportionally, and remits the net tax to SAT monthly. Employers file monthly withholding returns via SAT's online portal (Declaraguate or FEL). Employees receive annual tax certificates for their records. Failure to remit ISR withholding attracts penalties and interest on overdue amounts.

Self-Employed Individuals

Self-employed individuals and sole proprietors are taxed under the same progressive rates as employees but must file quarterly estimated returns. Estimated tax is payable in quarterly instalments. The annual return must be filed by 31 March of the following year. Self-employed individuals can deduct allowable business expenses to arrive at taxable profit. Proper invoices (facturas) must be issued under the FEL (Facturación Electrónica en Línea) electronic invoicing system.

FAQs

Do I need to file a return if my only income is from employment?

If ISR was fully withheld at source by your employer and you have no other Guatemala-source income, you generally do not need to file an annual return. However, if you have multiple employers or additional income, you must file.

Is foreign income taxable in Guatemala?

No, Guatemala uses a territorial tax system. Only Guatemala-source income is taxable. Foreign employment income, foreign dividends, and foreign capital gains are not subject to Guatemalan ISR.

What is the penalty for late filing?

Late filing attracts a penalty of 5% to 25% of the tax due plus interest at the legal rate. Continued non-compliance may result in asset seizure by SAT.

Disclaimer

This guide provides general information about Guatemalan personal income tax for the 2026 tax year. Tax laws, rates, and regulations may change. Always consult with a qualified Guatemalan tax advisor or SAT for advice specific to your situation. InvestmentKit does not provide tax advice.