Financial Crime World

Capital Outflow: Guatemala Imposes 5% Tax on Certain Transactions

Guatemala has introduced a new tax regime that applies to certain transactions involving the outflow of capital from the country. The 5% tax aims to regulate the flow of capital and ensure it is used for legitimate purposes.

What Does the Tax Apply To?

  • Corporate acquisitions
  • Mergers and acquisitions
  • Distribution of dividends among shareholders

The tax was introduced through the Tax Code and other relevant laws, according to experts. Estuardo Paganini, a partner at Deloitte Guatemala, emphasizes the importance of understanding the implications of this new tax regime to avoid potential penalties or disputes.

Other Tax Measures in Guatemala

In addition to the 5% tax on capital outflow, Guatemala has introduced other tax measures aimed at promoting economic growth and development. These include:

  • Value Added Tax (VAT)
  • Income Tax Law
  • Solidarity Tax Law

International Double Taxation

Guatemala has not signed any international double taxation agreements, which means that foreign investors may be subject to taxes in both their home country and Guatemala on the same income or capital gains.

Merger Control Regime

The country’s merger control regime is relatively lax, with no specific rules governing public takeovers. However, certain industries such as banking and energy may have specific regulations that apply to mergers and acquisitions.

Employee Protection

There are no specific provisions for protecting employees in cases of mergers and acquisitions. The general labor law will apply in such situations.

Foreign Direct Investment

Guatemala has no restrictions on investments, but investors must ensure that they transfer funds through a bank.

Exchange Control Requirements

The country’s exchange control requirements are relatively relaxed, with no need to obtain approval or notification for most transactions.

Entity Closure Process

The entity closure process is governed by the Commercial Code, which sets out the procedures for winding up and liquidating companies. The process typically involves convening a board meeting or general shareholders’ meeting to discuss dissolution and liquidation.

Contact Information

For more information on doing business in Guatemala, please contact: