Libro IV. Reformas al decreto número 27-92 del Congreso de la República, ley del impuesto al valor agregado

Numeral 8) of Article 3 of the Value Added Tax Law is amended, to read as follows:

"8) The first sale or exchange of immovable property."

Numeral 1 of Article 8 of the Value Added Tax Law is amended, to read as follows:

"1. Public and private educational centers, with respect to enrollment registration, tuition fees and examination fees, for the courses authorized for them by the competent authority."

The first paragraph of Article 16 of the Value Added Tax Law is amended to read as follows:

"Article 16. Entitlement to the fiscal credit. The right to the fiscal credit for its offset shall apply, for the importation and acquisition of goods and the use of services linked to economic activity. Economic activity means activity involving the combination of one or more factors of production, for the purpose of producing, transforming, commercializing, transporting or distributing goods for their sale or provision of services."

Article 23 of the Value Added Tax Law is amended to read as follows:

"Article 23. Taxpayers engaged in exportation, who provide services or sell goods to persons exempt from the tax, shall have the right to refund of the fiscal credit generated from the acquisition of inputs or from expenses directly linked to the performance of the aforementioned activities, pursuant to Article 16 of this Law. The refund shall be effected for accumulated expired tax periods, on a quarterly or semi-annual basis, in the case of the general procedure, and on a monthly basis, in accordance with the procedure established in Article 25 of this Law for those qualified under that regime.

For purposes of the refund of the fiscal credit to taxpayers who sell goods or provide services to exempt persons, the Financial Directorate of the Ministry of Public Finance shall program in the General Budget of Revenues and Expenditures of the State the budget allocation to address such refunds.

The amount that the Bank of Guatemala shall set aside to address refunds of fiscal credit to exporters, pursuant to Article 25 of the law, must be recorded for accounting purposes in the State Accounting Directorate, to quantify the amount of fiscal credit refund. For budget purposes, such amount shall form part of an annex to the General Budget of Revenues and Expenditures of the State for each fiscal year and, in no case, shall the Technical Budget Directorate contemplate the estimated amount for refunds in respect of this fiscal credit as part of annual tax revenues, nor shall a budget line item be assigned for such concept.

Taxpayers having an export percentage of less than fifty percent (50%) of their total annual sales, who cannot offset the fiscal credit against the fiscal debit received from their local sales, may request refund of the fiscal credit.

The refund or offsetting of the fiscal credit shall not be admissible in the following cases:

1.When it is detected that the authorization for issuance of invoices supporting the fiscal credit was made based on false documentation or prepared with information from official personal identity documents or false or nonexistent addresses. The tax administration shall notify the taxpayer of the applicable adjustment or file the corresponding complaint.

2.That the exporting taxpayer cannot document or prove before the Tax Administration that payments of the invoices were actually made; otherwise, he must attach to his application filed before the Tax Administration the documentation demonstrating the means or form of payment made, such being:

a.Copy of any of the following documents: checks, account statements, including those for credit or debit cards, or of any other means using the banking system other than cash, identifying the beneficiary, in which the payments made to suppliers are recorded, as established in Chapter III of the Legal Provisions for the Strengthening of Tax Administration regarding the use of the banking system in tax matters.

b.If the invoices were paid in cash, as provided in Chapter III of the Legal Provisions for the Strengthening of Tax Administration, he must submit supporting documentation, including as applicable, bank withdrawals, loans obtained or a breakdown of cash sales invoices whose cash was used to pay the purchase invoices and their respective accounting records.

Refunds authorized by the Tax Administration shall be subject to subsequent verifications, within the limitation period established in the Tax Code."

Numeral 4 of Article 24 of the Value Added Tax Law is amended, to read as follows:

"4) To be registered in the Register of Exporters and to prove compliance with the percentage of exports established in subparagraphs A) or B) of the fourth paragraph of Article 25 of the Value Added Tax Law."

Article 29 of the Value Added Tax Law is reformed, which shall read as follows:

"Article 29. Mandatory documents. Taxpayers subject to the tax under this Law are obligated to issue, with legible and permanent characters or by electronic means, for delivery to the purchaser and, in turn it is the obligation of the purchaser to demand and receive, the following documents:

a)Invoices, for sales, exchanges, leases, withdrawals, destruction, loss, or any act implying inventory shortage when it constitutes a taxable event for this tax, and for services rendered by subject taxpayers, even with respect to exempt transactions or transactions with exempt persons. In the latter case, it must be indicated on the invoice that the sale or provision of service is exempt and the corresponding legal basis.

b)Small Taxpayer Invoices, in the case of taxpayers affiliated with the Small Taxpayer Regime established in this Law.

c)Debit notes, for price increases or surcharges on transactions already invoiced.

d)Credit notes, for returns, cancellations or discounts on transactions already invoiced.

e)Other documents that, in specific cases and duly justified, the Tax Administration authorizes to facilitate taxpayers' proper and timely compliance with their tax obligations.

The Tax Administration is empowered to authorize, at the request of the taxpayer, the use of invoices issued on tapes, by cash registers, electronically or by other means, provided that the nature of the activities carried out fully justifies it. The regulations shall develop the requirements and conditions."

Article 55 of Decree Number 27-92 of the Congress of the Republic, Value Added Tax Law, is reformed, which shall read as follows:

"Article 55. Tax base and rates in the alienation of vehicles and motorcycles. In cases of alienation of land motor vehicles of the model of the current year, of the following year and of the year prior to the current year, and of all kinds of maritime and air vehicles, the Value Added Tax shall be paid according to the rate established in Article 10 of this Law. For these cases, the tax shall be paid in accordance with the table of taxable values prepared annually by the Tax Administration, approved by the Board of Directors of the Superintendency of Tax Administration, and published in the official gazette and on the website of the Tax Administration, in the month of November of each year.

The model year of land motor vehicles shall be determined by verification of the Vehicle Identification Number (VIN), which must physically appear on vehicles entering the national territory and in the import documents.

In cases of sale, exchange or inter vivos donation of land motor vehicles that are not of the model of the current year, of the year following the current year or of the year prior to the current year, with the exception of motorcycles, the tax shall be applied in accordance with the following scale of specific rates:

Model Fixed rate

From two to three years prior to the current year One thousand quetzales (Q.1,000.00)

From four or more years prior to the current year Five hundred quetzales (Q.500.00)

In cases of sale, exchange or inter vivos donation of motorcycles that are not of the model of the current year, of the year following the current year or of the year prior to the current year, the tax shall be applied according to the annual model, applying the following scale of fixed specific rates:

Model Fixed rate

From two to three years prior to the current year Three hundred quetzales (Q.300.00)

From four or more years prior to the current year Two hundred quetzales (Q.200.00)

For cases of vehicles that have incurred total loss or destruction, and that are the object of sale, exchange or inter vivos donation, and that are already registered, the rate established in Article 10 of this Law shall not be applied, and the maximum fixed specific rate established in the preceding paragraphs of this article shall be applied. Such circumstance of total loss or destruction must be certified by an insurance company duly authorized to operate in the country.

In cases of importation of land motor vehicles including motorcycles, the Value Added Tax shall be paid according to the rate established in Article 10 of this Law. For these cases, the tax base for land motor vehicles of the models prior to the year of the model of the current year is the value stated in the original invoice, issued by the seller of the vehicle abroad, provided that it complies with the legal requirements established by law in the country of its issuance and that the authenticity of said invoice can be verified by the Tax Administration, in addition to proving and documenting payment of the invoiced value through the means made available by the banking system.

In the event of failure to comply with what is required in the preceding paragraph, the tax base of the tax shall be the value of the vehicle appearing in the table of taxable values that the Superintendency of Tax Administration must prepare annually, which the Board of Directors of that Superintendency must approve and publish in the official gazette and on the website of the Tax Administration, in the month of November of each year.

The tax base for land motor vehicles of the models of the current year and of the year following the model of the current year shall be the import value defined as the addition of cost, insurance and freight (CIF) reported by the manufacturers or importers."

Article 56. Tax base in the case of immovable property.

For the first sale or exchange of immovable property or for the other cases of transfers of immovable property, the tax base is the sale price stated in the invoice, public deed or that recorded in the fiscal registry, whichever is greater. If the seller is a registered taxpayer of this tax and its activity is the construction or sale of immovable property, including land with or without construction, the tax base is the sale or exchange price or that recorded in the fiscal registry, whichever is greater.

Where the transferor is not a taxpayer of the tax or, being a taxpayer, its habitual business is not dealing in immovable property, in any form of transfer of ownership of immovable property taxed under this Law, the tax base is the price of the transfer which must be stated in the public deed or that recorded in the fiscal registry, whichever is greater. In all cases the Tax Identification Number -NIT- of the contracting parties must be stated and the means of payment used in the purchase-sale must be identified.

Where contributions of immovable property are taxed, the tax base shall be the value of the immovable property as estimated by an authorized appraiser. An authenticated copy of said appraisal must be added, as an attachment, to the certified copy of the public deed issued for registration purposes. Public registries are obligated to require presentation of this document.

Article 57 of Decree Number 27-92 of the Congress of the Republic, Value Added Tax Law, is amended to read as follows:

"Article 57. Date and form of payment. In the alienation, sale, exchange or inter vivos donation of land motor vehicles, of the model of the current year, of the year following the current year or of the year preceding the current year, if the seller, exchanger or donor is a taxpayer registered as importer, distributor, representative, franchisee or concessionaire, or if he is an occasional or temporary importer, the tax shall be determined by applying the rate established in Article 10 of this Law and shall be paid at the time of the sale, exchange or donation, so that the importer or distributor recovers the fiscal credit for the tax paid upon nationalization.

For the case of vehicles that are not of the model of the current year, of the year following the current year or of the year preceding the current year, the tax shall be determined based on the scale of specific rates established in Article 55 of the Value Added Tax Law and shall always be paid in cash by the acquirer, in the banks of the system or institutions authorized for such purpose, within the time limit of fifteen working days counted from the date on which the endorsement for the alienation, sale, exchange or donation of the vehicle is legalized in the Vehicle Ownership Certificate issued pursuant to the Law on the Tax on Circulation of Land, Maritime and Air Vehicles, which shall be used as the basis to effect the change of owner in the Fiscal Register of Vehicles.

In the alienation, sale, exchange or inter vivos donation of land motor vehicles carried out after the first sale, they shall be formalized in the Vehicle Ownership Certificate, which shall be provided by the Tax Administration or by the institution expressly designated for such purpose.

Said certificate shall contain all the information on the vehicle in transaction and on the parties thereto. It shall also contain the statement for the legalization of the signatures, which must be performed before a Notary; this information shall support the changes in the control records kept by the Fiscal Register of Vehicles. The Notary is obligated to send a notice to the Tax Administration by the means it provides, within the first fifteen days of each month, of the legalizations of signatures performed in the previous month, in accordance with this article. The regulation shall establish the requirements for this notice.

The tax shall be paid using the means made available by the Tax Administration, which shall contain the information necessary to effect the change of owner in the Fiscal Register of Vehicles.

In the cases of transfer of ownership of immovable property taxed by this Law, if the seller is a taxpayer registered for the tax and his activity is the construction or sale of immovable property, including land with or without construction, the alienation shall be documented in a public deed for register purposes, but the tax shall be paid in the invoice for the sale and on the date on which it is issued.

The amount of the tax and the identification of the invoice must be recorded in the final attestation of the transcript of the translative deed of ownership. Against the resulting fiscal debit from the tax actually charged by the taxpayers, they shall recover the fiscal credit generated in the purchase of materials, construction services and in the acquisition of immovable property, until exhausted.

When the alienor is not a taxpayer of the tax or, being a taxpayer, his usual business is not trading in immovable property, in the cases of transfer of ownership of immovable property taxed by this Law, the alienation shall be documented in a public deed and the tax shall be paid by the acquirer in cash or by any means that the Tax Administration makes available, within the time limit of fifteen (15) days following the date of authorization of the deed, whether or not the transcript has been issued. The Notary is obligated to record in the final attestation of the transcript of the public deed, the amount of the tax encumbering the contract and shall attach the receipt or legalized photocopy of the respective payment receipt."