Guatemala taxes on a territorial basis: only Guatemala-source income is taxed, for both individuals and companies. Guatemala has no Controlled Foreign Company regime. Guatemala operates a self-assessment system, with the Superintendencia de Administracion Tributaria (SAT) conducting post-filing review.
The Guatemalan tax year is the calendar year (a simplified regime taxpayer may use a different fiscal year). The corporate filing deadline is generally 31 March of the following year.
Guatemala's headline corporate income tax (CIT) rate is 25% (net income) or 7% (simplified gross income).
The headline personal income tax (PIT) rate is 7%.
The standard VAT/GST (or equivalent consumption tax) rate is 12%.
An individual is tax resident in Guatemala if present in the country for 183 days or more (not necessarily consecutive) in a calendar year, or if Guatemala is the seat of their center of economic interests. An entity is resident if incorporated under Guatemalan law, has its registered office or tax domicile in Guatemala, or has its place of effective management (direction and control of all its activities) in Guatemala. Guatemala runs a genuinely territorial system: both residents and non-residents are taxed only on Guatemala-source income - residency status does not by itself trigger worldwide taxation. Guatemala-source income covers profitable activities (trade, business, sale of goods, services rendered) and separately-taxed capital income and capital gains arising from Guatemalan assets or rights. Under the Optional Regime, gross income from lucrative activities is taxed at 5-7%; under the Net Profit Regime, net income is taxed at 25%. Foreign-source income earned by a Guatemala resident - for example a digital nomad billing non-Guatemalan clients - falls outside the system entirely and is not reported or taxed in Guatemala.
A non-Guatemalan entity has a Guatemala permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Guatemala on the entity's behalf, following the OECD Model Treaty definition as applied under Guatemalan domestic law and any applicable tax treaty.
Guatemala has no CFC regime - confirmed independently by two secondary sources describing Guatemala's international tax framework. This follows directly from the territorial design: since foreign-source income is outside the tax base entirely regardless of who receives it, there is no mechanism (or need for one) to attribute a foreign subsidiary's undistributed profits back to a Guatemalan resident shareholder. Guatemala has transfer pricing rules requiring related-party transactions to be priced at arm's length, with a broad definition of "related parties" covering stock ownership, business groups, control relationships, and exclusive distributors/agents, but has no general anti-avoidance rule (GAAR).
Sources conflict on this point. A Latin America tax-group law firm guide states Guatemala's Income Tax Law includes a thin capitalization rule capping deductible related-party debt at a 3:1 debt-to-net-assets ratio (net assets averaged between the prior and current fiscal year, per Income Tax Return declarations), with an exception for regulated banks, financial institutions, and savings and loan associations. A separate, lower-quality company-formation aggregator states thin capitalization standards are not officially enacted in Guatemala. Given the specificity and legal citation in the law firm source versus the generic claim in the aggregator, the 3:1 ratio described in the law firm guide is treated as the more reliable answer here, but confirm current applicability directly with a Guatemala-licensed tax advisor before relying on it for a specific related-party financing structure.
Guatemala does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Guatemala does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; consistent with Guatemala's territorial system, foreign-source income falls outside the Guatemala tax base entirely and is not reported on the annual tax return at all.
Guatemala's territorial system already excludes foreign-source income from the domestic tax base entirely, functioning as a broader substitute for a conventional participation exemption.
Guatemala's territorial tax system limits the practical role of a foreign tax credit, since foreign-source income is generally outside the Guatemalan tax base to begin with.
Guatemala has no comprehensive double tax treaties in force with any country. It does maintain bilateral investment treaties and free trade agreements providing investor protection (international arbitration in the event of nationalization or expropriation, not double-tax relief) with jurisdictions including the Dominican Republic, Luxembourg, the Netherlands, Panama, Spain, Switzerland, and Trinidad and Tobago.