Banks Required to Provide Information for Tax Purposes

In a move aimed at strengthening tax supervision, the Superintendency of Taxes (SAT) has announced that it may request information from banks related to local and foreign accounts, movements, transactions, investments, assets, or other operations and services carried out by individuals or entities whenever there is reasonable doubt regarding activities which may merit investigation.

Procedure for Requesting Information

According to the SAT, these requests for information must be authorized by a judge, and the Tax Code details a procedure and requirements to that end. The SAT may appeal if the judge denies the request.

• Requests for information are subject to judicial authorization
• The Tax Code outlines a procedure and requirements for requesting information
• The SAT may appeal if the judge denies the request

Consequences of Non-Compliance

Banks that fail to comply with a valid court order to provide information are subject to criminal penalties for resisting tax supervision.

Prudential Regime

The Guatemalan banking system is subject to a prudential regime aimed at ensuring the stability and solvency of banks. According to the Monetary Board, banks must maintain a minimum amount of patrimony in relation to their exposure to risks, which may not be lower than 10% of the assets and contingencies.

Requirements for Banks’ Computable Patrimony

The Regulation for Determination of the Minimum Amount of Required Patrimony for Exposure to Risks, Applicable to Banks and Financial Companies, outlines the requirements for banks’ computable patrimony, which includes:

• Primary capital
• Complementary capital
• Other components

Accumulated losses and those of the current period must be deducted from complementary capital, and if insufficient, from primary capital. A bank’s patrimonial position is the difference between computable patrimony and required patrimony.

Insolvency, Recovery, and Resolution

The Banks and Financial Groups Act provides a legal framework for the resolution and suspension of failing banks. When a bank has a patrimonial deficiency, it must notify the Superintendency of Banks (SIB) and present a regularisation plan for its approval.

• The plan must include measures to address the deficiency
• Measures may include reducing assets or contingencies, capitalising reserves, increasing authorised capital, or contracting subordinated credits

The SIB may approve, reject, or amend the bank’s proposal. In cases of grave danger to a bank’s liquidity and solvency, the Monetary Board may suspend operations.

Effects of Suspension

This suspension entails several effects, including:

• The suspension of judicial procedures against the bank
• The suspension of enforceability of its liabilities

Conclusion

The Guatemalan banking system is subject to strict regulations aimed at ensuring stability, solvency, and transparency. Banks are required to maintain minimum levels of patrimony and may be subject to regularisation plans or even suspension of operations if they fail to comply with regulatory requirements. The SAT’s ability to request information from banks for tax purposes adds an additional layer of oversight to the system.