Título II. Del impuesto

The tax is generated by:

1)The sale or exchange of movable property or of real rights constituted thereon.

2)The provision of services in the national territory.

3)Imports.

4)The lease of movable property and immovable property.

5)The adjudications of movable property and immovable property in payment, except those carried out on the occasion of the partition of the hereditary estate or the termination of the undivided co-ownership.

6)The withdrawals of movable property carried out by a taxpayer or by the owner, partners, directors or employees of the respective enterprise for their personal use or consumption or that of their family, whether of their own production or purchased for resale, or the self-supply of services, whatever the legal nature of the enterprise may be.

7)The destruction, loss or any fact implying inventory shortage, except when it concerns perishable property, fortuitous events, force majeure or crimes against property. When it concerns fortuitous events or force majeure, what occurred must be recorded in a notarial record. If it concerns cases of crimes against property, it must be proven by means of certification of the complaint filed before the police authorities and which has been ratified in the corresponding Trial Court. In any case, these facts must be recorded in the reliable accounting in chronological form.

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

9)The inter vivos donation of movable property and immovable property.

10)*The contribution of immovable property to companies, pursuant to the provisions of numeral 3, literal d) of Article 7 of this law.

In the cases indicated in numerals 5, 6 and 9 above, for purposes of the tax, the tax base shall in no case be less than the acquisition price or the manufacturing cost of the property.

* Numeral 7) corrected by Erratum of June 23, 1992.

The tax under this law must be paid:

1)For the sale or exchange of movable property, on the date of issuance of the invoice. When delivery of the movable property is prior to issuance of the invoice, the tax must be paid on the date of actual delivery of the property.

For the provision of services, on the date of issuance of the invoice. If no invoice has been issued, the tax must be paid on the date on which the taxpayer receives the remuneration.

In the case of the sale or exchange of motor vehicles, as provided in Article 57 of this law, the tax must be paid by the acquirer on the date on which the invoice is issued.

In the event that, pursuant to the law, the sale is executed exclusively in a public deed, the certified copy recording payment of the tax must be issued within fifteen days from the date of execution of the deed, under the liability of the buyer.

If the certified copy is issued after the time limit indicated in the preceding paragraph, the interest and fines legally applicable shall be charged, which the notary shall record in the notation of the untimely certified copy.

2)For imports, on the date on which payment of the respective duties is made, as evidenced by a legally issued receipt. Customs offices shall not authorize removal of the property from the customs premises unless the corresponding taxes have been duly paid beforehand.

3)For adjudications, at the time the respective property is documented or delivered.

4)For withdrawals of movable property provided for in Article 3, numeral 6), at the time of withdrawal of the respective property or provision of the service.

5)For leases and for the provision of periodic services, at the end of each period established for payment of the rent or remuneration actually received.

6)For inventory shortages referred to in numeral 7) of Article 3, at the time the shortage is discovered.

7)For insurance and bond matters, at the time the premiums or installments are actually received.

The tax affects the taxpayer who enters into an act or contract taxed by this law.

The following are also persons liable for the tax:

1)The importer, whether habitual or not.

2)The taxpayer purchaser, when the seller is not domiciled in Guatemala.

3)The beneficiary of the service, if the person making the supply is not domiciled in Guatemala.

4)The purchaser, when carrying out transactions in accordance with Article 52 of this law.

5)Civil companies, commercial companies, irregular companies, and de facto companies and co-ownerships, except hereditary communities, in the cases provided for in Article 3, numeral 5). If such persons do not cover the tax, each awardee shall be liable for its payment in the part corresponding to the property awarded to such awardee.

*Numeral 5) corrected by numeral 3 of the Errata of June 23, 1992.

The following are exempt from the tax established in this law:

1.Imports of movable property carried out by:

a)Cooperatives, federations and confederations of cooperatives, legally constituted and registered, when involving machinery, equipment and other capital property directly and exclusively related to the activity or service of the cooperative, federation or confederation.

b)Individual or legal persons covered by a temporary import regime;

c)Travelers entering the country, movable property as baggage, on which they do not have to pay import duties in accordance with customs legislation;

d)Guatemalan diplomatic and consular public officials and employees returning to the country upon concluding their mission, with respect to household goods, personal effects and one vehicle;

e)Diplomatic and consular missions accredited to the Government of the Republic, and the persons referred to in the Vienna Convention on Diplomatic and Consular Relations, on condition that the countries to which such missions and persons belong grant equal treatment on a reciprocal basis;

f)International organizations in accordance with the respective agreements executed between the Government of the Republic of Guatemala and such organizations.

For purposes of literal a) above, such exemption must be requested from the Ministry of Economy upon prior favorable opinion of the National Cooperatives Institute (INACOP) so that the Ministry of Public Finance grants the corresponding franchise, authentically evidencing its right to the exemption.

2.*Exports of property and exports of services, in accordance with the definition in Article 2, numeral 4 of this law.

3.*Transfers of ownership of movable and immovable property in the following cases:

a)Mergers of companies.

b)Inheritances, bequests and donations upon death.

c)Contributions of movable property to companies.

d)Contributions of immovable property to companies.

The contribution of immovable property to companies shall not be exempt when the immovable property to be contributed is all or part of immovable property previously contributed to a company engaged in real estate development.

To enjoy this exemption the contributor shall declare under oath, in the public deed recording the contribution of the property or in a notarial record, that the immovable property to be contributed meets the conditions established in this article to enjoy the exemption.

4.Services provided by institutions supervised by the Superintendency of Banks and stock exchanges authorized to operate in the country. With respect to insurance and bonding activity, only reinsurance and rebonding operations are exempt.

5.Cooperatives shall not charge the Value Added Tax (IVA) when carrying out sales operations and provision of services with their members, cooperatives, federations, service centrals and confederations of cooperatives.

In their operations with third parties they must charge the corresponding tax. The tax paid by the cooperatives to their suppliers forms part of the fiscal credit.

In the case of savings and credit cooperatives, the services they provide, both to their members and to third parties, are exempt.

6.Creation, issuance, circulation and transfer of credit instruments, securities and shares of any kind, except for the bill of exchange invoice, when the issuance, acceptance or negotiation corresponds to acts taxed under the present law.

7.Interest accruing on credit instruments and other obligations issued by commercial companies and negotiated through a stock exchange, duly authorized and registered in accordance with current legislation.

8.Creation of trusts and return of the trust property to the trustor. Taxed acts under this law carried out by the trustee remain subject to payment of this tax.

9.Contributions and donations to associations, foundations and educational, cultural, assistance or social service institutions and non-profit religious institutions, legally constituted and duly registered as such.

10.Payments for membership rights and periodic dues to social, trade, cultural, scientific, educational and sports associations or institutions, as well as to professional colleges and political parties.

11.Retail sale of meats, fish, seafood, fresh fruits and vegetables, cereals, legumes and basic grains to final consumers in cantonal and municipal markets, provided such sales do not exceed one hundred quetzales (Q. 100.00) per transaction.

12.*Sale of housing with a maximum of eighty (80) square meters of construction whose value does not exceed two hundred fifty thousand quetzales (Q.250,000.00) and that of urbanized lots including basic services, with a maximum area of one hundred twenty (120) square meters, whose value does not exceed one hundred twenty thousand quetzales (Q.120,000.00). In addition, the acquirer must evidence that he and his family group lack their own housing or other immovable property. All of the foregoing must be stated in the respective public deed.

With the exception of the housing indicated in the preceding paragraph, second and subsequent transfers of ownership of housing under any title shall be taxed in accordance with the Law on Fiscal Stamps and Special Stamped Paper for Protocols.

13.Services provided by associations, foundations and educational, assistance or social service institutions and religious institutions, provided they are duly authorized by law, have no profit-making purpose and in no way distribute profits among their associates and members.

14.Sale of assets of Banks or Financial Companies for which the Superintendency of Banks has approved a regularization plan or in which there is an Assets and Liabilities Exclusion Board, when transferred to other Banks or financial companies, upon prior authorization of the Monetary Board. This exemption shall be valid provided the transaction is not to evade civil, criminal, or other liabilities.

15.Purchase and sale of medicines denominated generic and alternative medicines of natural origin, registered as such in the Sanitary Register of the Ministry of Public Health and Social Assistance, in accordance with the Health Code and its Regulation. Also exempt from the tax referred to in this Law are the purchase and sale of antiretroviral medicines acquired by persons suffering from HIV/AIDS disease, whose treatment is under the charge of public and private entities duly authorized and registered in the country, engaged in combating such disease.

* Numeral 10 corrected by Erratum of June 23, 1992.

Of the specific exemptions. The following persons shall not charge the tax on their sales operations, nor on the provision of services:

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

2.Universities authorized to operate in the country.

3.The Autonomous Sports Confederation of Guatemala and the Guatemalan Olympic Committee.

4.The Guatemalan Social Security Institute.

5.Diplomatic and consular missions accredited to the Government of the Republic, as well as diplomatic agents, diplomatic and consular public officials and employees included in the Vienna Convention on Diplomatic and Consular Relations, on the condition that the countries to which such missions and persons belong grant equal treatment on a reciprocal basis.

6.International organizations to which, in accordance with the respective agreements signed between the Government of the Republic of Guatemala and such organizations, the exemption from taxes has been granted.

* Numeral 7 corrected by numeral 5 of the Errata of June 23, 1992.

The persons listed in preceding Article 8 are exempt from bearing the tax generated by the taxable acts under this Law and shall receive from whoever sells to them or provides a service to them the corresponding invoice, but they shall not pay the amount of the tax stated in the document, but shall deliver to such persons the exemption certificate duly authorized by the Tax Administration.

With respect to imports made by such persons, they shall request in advance and on each occasion that the Tax Administration decide whether the exemption applies. In the cases of items 5 and 6 of Article 8 of this Law, a prior favorable opinion of the Ministry of Foreign Affairs shall be required. Once the decision authorizing each exemption and the respective franchise has been issued, the Tax Administration shall not apply the tax and, therefore, the exempt persons shall not issue an exemption certificate for the authorized import.

For control of the exemptions, the Tax Administration shall authorize and notify the use of a document identifying the beneficiaries of the exemptions established in this article. Such document is intended to enable them to identify themselves before third parties as holders of the exemption right. The Tax Administration shall establish the characteristics of the identification, as well as the procedures, means and forms for its preparation, delivery, use and expiry thereof.

* First paragraph corrected by item 6 of the Errata of June 23, 1992.

Taxpayers subject to the provisions of this law shall pay the tax at a rate of twelve percent (12%) on the tax base. The tax rate in all cases shall be included in the sale price of the goods or the value of the services.

From the collection resulting from the single rate applied, the amount corresponding to three and one-half percentage points (3.5%) shall be allocated in full to the financing of peace and development, for the execution of programs and projects of education, health, infrastructure, introduction of drinking water services, electricity, drainage, waste management or to the improvement of current services.

The distribution of the resources and the financial intermediaries to channel the three and one-half percentage points (3.5%) of the tax rate shall be:

1.One and one-half percentage points (1.5%) for the municipalities of the country.

The municipalities may allocate up to a maximum of twenty-five percent (25%) of the allocation established pursuant to this article, for operating expenses and payment of benefits and retirement pensions. The remaining seventy-five percent (75%) shall be allocated exclusively for investment, and in no case may they pledge nor enter into financial commitments that encumber the allocations that they would be entitled to receive under this concept after their constitutional period.

2.One percentage point (1%) for the infrastructure programs and projects of the Departmental Development Councils. These shall be responsible for the administration of the resources, therefore the Ministry of Public Finance shall transfer them directly to them, through the Bank of Guatemala.

3.One percentage point (1%) for the Peace Funds, while they exist. When the peace funds cease to exist, such collection shall pass to the common fund.

From the collection resulting from the single rate applied, the amount corresponding to one and one-half percentage points (1.5%) shall be specifically allocated to the financing of social expenditures in programs and projects for food security for the population in conditions of poverty and extreme poverty, primary and technical education, and citizen security, as follows:

a)One-half percentage point (0.5%) specifically for programs and projects for food security of the population in conditions of poverty and extreme poverty, which shall include programs and projects for mothers with unborn children, maternal-child assistance and preschool and school programs;

b)One-half percentage point (0.5%) specifically for primary and technical education programs and projects;

c)One-half percentage point (0.5%) specifically for citizen security and human rights programs and projects and,

d)Zero point eight (0.8%), specifically for the operation of the School Feeding Program in the Ministry of Education.

The resources derived from the collection corresponding to the five percentage points (5%) contemplated in the preceding paragraphs, the Government of the Republic shall deposit them in the Bank of Guatemala in a special account denominated "Fund for Development, Social Expenditure and Peace", within the fifteen (15) days immediately following their monthly collection.

All resources with a specific destination shall be applied exclusively to the programs and projects referred to in this article, in the manner established in the General Budget of Income and Expenditures of the State, approved for each fiscal year by the Congress of the Republic.

* Added by Article 1 of Decree Number 32-2003 of the Congress of the Republic * Provisionally Suspended pursuant to Accumulated Files Numbers 1060-2003 and 1064-2003, of the Constitutional Court. * Declared unconstitutional pursuant to the ruling of the Constitutional Court in Files Numbers 1060-2003 and 1064-2003.

The tax base for sales shall be the price of the transaction less discounts granted in accordance with commercial practices. The following items shall be added to said price, even when invoiced or accounted for separately:

1.Financial readjustments and surcharges.

2.The value of containers, packaging and deposits established by buyers to guarantee their return. When such deposits are returned, the taxpayer shall deduct from its fiscal debit for the period in which such return occurs the tax corresponding to the sum returned. The buyer shall likewise deduct the same amount from its fiscal credit.

3.Any other sum charged by taxpayers to their purchasers appearing on the invoices.

The tax base in the supply of services shall be the price thereof less discounts granted in accordance with commercial practices. The following items shall be added to said price, even when invoiced or accounted for separately:

1)Financial readjustments and surcharges.

2)The value of the goods used for the supply of the service.

3)Any other sum charged by the taxpayers to their acquirers appearing in the invoices, except contributions or levies established by specific laws.

In the following cases, the tax base shall be understood as:

1)For imports: The value resulting from adding to the CIF price of the imported goods the amount of customs duties and other surcharges collected by reason of importation or entry. When the CIF value does not appear in the respective documents, the Customs office of entry shall determine it by adding to the FOB value the amount of freight and that of insurance, if any.

2)In the lease of movable property and immovable property: The rental value, to which the value of financial surcharges shall be added, if any.

3)In the adjudications referred to in Article 3, numeral 5): The value of the respective adjudication.

4)In the withdrawals of movable property provided for in Article 3, numeral 6): The acquisition price or manufacturing cost of the movable property. It shall be determined in the same manner for inventory shortages and donations referred to in Article 3, numerals 7 and 9, respectively.

* Numeral 4 as corrected by Corrigendum of June 23, 1992.

The fiscal debit is the sum of the tax charged by the taxpayer in the taxable transactions carried out in the respective tax period.

For tax purposes, the calculation basis of the fiscal debit is the sale price of the good or provision of services, with discounts granted already included.

In public entertainment, theater and similar services, taxpayers shall issue the corresponding invoice.

The tax credit is the sum of the tax charged to the taxpayer for the taxable transactions carried out during the same period.

The right to the tax credit for its offset shall apply, for the importation and acquisition of goods and the use of services that are linked to the economic activity. Economic activity means the activity involving the combination of one or more factors of production, for the purpose of producing, transforming, marketing, transporting or distributing goods for their sale or provision of services.

The tax paid for the acquisition, importation or construction of fixed assets shall be recognized as a tax credit when such assets are directly linked to the production or marketing process of the taxpayer's goods and services. The tax paid by the taxpayer and recognized as a tax credit for the importation, acquisition or construction of fixed assets shall not form part of the acquisition cost thereof for purposes of annual depreciation under the Income Tax regime.

Taxpayers engaged in exportation and those that sell or provide services to exempt persons in the domestic market shall be entitled to a refund of the tax credit when the tax has been generated by the importation, acquisition of goods or the use of services that are applied to taxable acts or transactions covered by this law, linked to the productive or marketing process of the taxpayer's goods and services.

The Regulation of the Value Added Tax Law shall develop matters relating to expenses that shall not generate tax credit for the tax.

To establish which goods or services are considered linked to the production or marketing process of the taxpayer's goods and services, the Tax Administration shall apply the following criteria:

a)That the goods or services form part of the products or of the activities necessary for their national or international marketing.

b)That the goods or services are incorporated into the service or into the activities necessary for its provision within or outside the country.

Consequently, all those goods or services must be considered that are of such a nature that without their incorporation the production or marketing of the goods or the provision of the service would be impossible.

The Value Added Tax return of a taxpayer that makes sales or provides services in the national territory and that carries out exports shall file such return, showing separately the settlement of tax credits and debits, for each of the aforementioned activities.

As a result of the offset between the taxpayer's credits and debits, there shall result a refund of the outstanding balances of the tax credit for the export operations carried out by the taxpayer or a balance in favor of the Treasury.

For such purpose, the procedure shall be as provided in Articles 23, 23 “A”, 24 and 25 of this Law, as applicable.

From the credit calculated in accordance with Article 15 of this law, the taxes corresponding to the amounts received for bonuses, discounts and returns, which the sellers or service providers have, in turn, deducted when effecting the deductions, shall be deducted. Moreover, the tax stated in the debit notes received and recorded during the month, for increases in taxes already invoiced, shall be added to the fiscal credit.

Debit or credit notes, as applicable, shall be issued and delivered, the original to the acquirer of goods or services and the respective copy, with signature and reception stamp, shall remain in the possession of the issuer.

Likewise, debit or credit notes, as applicable, shall be recorded in the accounting of the seller of goods or service provider, within the time limit of two months, counted from the date on which the invoice to be modified or canceled by means of the referred documents was issued, in which the number and date of the invoice for which they were issued shall be recorded.

In the case of debit notes, if they are not recorded within the two months indicated in the preceding paragraph, the taxpayer shall not be entitled to recognition of the corresponding fiscal credit.

Tax credit shall be recognized when the following requirements are met:

a)That it is supported by invoices, special invoices, debit or credit notes printed by the printing houses or the taxpayers that self-print the documents and that are registered in the Tax Register of Printing Houses, as established by law, likewise those payment receipts in the case of imports or in public deeds, in accordance with the provisions of Article 57 of this Law, electronic invoices, electronic debit and credit notes, provided that they have been issued through an Electronic Invoice Generator (GFACE) that is duly authorized by the Tax Administration;

b)That such documents are issued in the name of the taxpayer and contain its Tax Identification Number;

c)That the document indicates in detailed form the description, units and values of the purchase of the goods, and when services are involved, the specific class of service received and the amount of the remuneration or fee must be specified;

d)That they are recorded in the purchase book referred to in Article 37 of this Law; and,

e)That the tax credit balance is recorded in the accounting books as an account receivable in favor of the taxpayer.

To be entitled to recognition of the tax credit, the taxpayer must also comply with the requirements indicated in Articles 16, 17 and 20 of this Law.

In the case of debit or credit notes, as applicable, issued electronically through an Electronic Invoice Generator (GFACE) authorized by the SAT, the original shall be issued and delivered to the purchaser of goods or services and the respective electronic copy shall remain in the possession of the issuer.

* Subparagraph a) as corrected by item 8 of the Errata of June 23, 1992.

The net sum that the taxpayer must remit to the Treasury in each taxable period is the difference between the total debits and the total tax credits generated.

The tax credit must be reported in the monthly return. The dates of the invoices and of the legally issued receipts for payment of import duties must correspond to the month of the period being settled. If for any circumstance they are not reported in the month to which they correspond, for purposes of claiming the tax credit, they may be reported at the latest in the two immediately following months of the taxable period in which its operation corresponded. If not effected within said time limit, there shall be no right to its offset or refund, as applicable.

* Heading as corrected by Errata, numeral 9) of June 23, 1992.

* Paragraph as corrected by Errata, numeral 10) of June 23, 1992.

If, from the application of the rules established in the preceding articles, a credit remainder in favor of the taxpayer results with respect to a tax period, such remainder shall be accumulated to the credits having their origin in the following tax period.

The fiscal credit balance in favor of the taxpayer resulting monthly from the return filed with the Tax Administration may be carried forward by the taxpayer to successive subsequent taxable periods until it is exhausted, by offsetting the fiscal debits of the tax, and therefore no refund of the fiscal credit shall be granted. Excepted are the cases referred to in Article 23 of this Law.

Taxpayers engaged in exportation, providing services or selling goods to persons exempt from the tax, shall have the right to a refund of the fiscal credit generated from the acquisition of inputs or from expenses directly linked to the performance of the aforementioned activities, as provided in Article 16 of this Law. The refund shall be made 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 such regime.

For purposes of the refund of the fiscal credit to taxpayers selling goods or providing 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 cover such refunds.

The amount to be set aside by the Bank of Guatemala, to cover refunds of fiscal credit to exporters, pursuant to Article 25 of the Law, shall be recorded for accounting purposes in the State Accounting Directorate, to quantify the amount of fiscal credit refund. For budgetary 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 include the estimated amount for refunds in respect of this fiscal credit as part of annual tax revenues, nor shall a budget line item be allocated for such purpose.

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 a refund of the fiscal credit.

Refund or offset of the fiscal credit shall not be allowed 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 documentation prepared with information from false or nonexistent official personal identity documents or 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, [the taxpayer] shall attach to its application filed before the Tax Administration the documentation evidencing 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 any other means using the banking system other than cash, that identifies the beneficiary, evidencing payments made to suppliers as provided in Chapter III of the Legal Provisions for Strengthening Tax Administration concerning 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 Strengthening Tax Administration, [the taxpayer] shall submit supporting documentation, which shall include, as applicable, bank withdrawals, loans obtained or a breakdown of cash sales invoices, the cash proceeds of which were used to pay the purchase invoices, and their respective accounting records.

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

* First paragraph corrected by numeral 11 of the Errata of June 23, 1992.

* Third paragraph, corrected by numeral 12 of the Errata of June 23, 1992.

Individual or juridical persons who request the refund of the tax credit must process it for elapsed periods of the Value Added Tax duly paid.

The request for refund of the tax credit may be made by the taxpayer who is entitled thereto, accumulating on a quarterly or semi-annual basis the amount of the Value Added Tax subject to refund, provided that a tax credit balance remains in favor of the exporter or taxpayer doing business with exempt entities.

The taxpayer shall file its request for refund of the tax credit before the Tax Administration, attaching:

a)Original of the invoices issued by its suppliers, from which the claimed tax credit was generated.

b)The taxpayer's book of purchases and sales in the medium, form and format indicated by the Tax Administration.

c)In the case of taxpayers who have sold goods or rendered services exclusively to exempt entities, they shall submit a copy of the invoice issued in such transaction, as well as the accounting certification of its recording in their accounting records.

d)When he is an occasional exporter, he shall attach the customs declarations of export of the merchandise, with a duly detailed inventory thereof, as well as a copy of the commercial invoices issued to him by the suppliers.

Upon request of the Tax Administration, the applicant for refund of tax credit shall submit to it:

a)Copy of the check or account statement evidencing payment of its suppliers' invoices, corresponding to the tax periods of the Value Added Tax in which the tax credit was generated and for which its refund is requested, as well as the document evidencing that the supplier has received the respective payment.

b)If he is a withholding agent, he shall submit the documents evidencing his strict compliance as such.

The aforementioned documents shall be submitted before the Tax Administration and a photocopy shall be delivered thereto, so that they may be compared with their originals. Once compared with the photocopies, they shall be returned to the taxpayer and the respective file shall be formed with the photocopies provided.

Once the aforementioned documentation has been completed, the Tax Administration shall verify whether the tax credit balance is admissible or inadmissible, and must decide within a maximum time limit of thirty (30) working days for the quarterly period and sixty (60) working days for the semi-annual period, the authorization for the Bank of Guatemala to effect the refund, chargeable to the VAT Fund account, for refunds of tax credit to exporters or to those persons who have sold goods or rendered services to persons exempt from the tax.

If the Tax Administration makes adjustments to the requested tax credit, it shall proceed to notify them and, for the unadjusted balance, it shall issue the authorization for the Bank of Guatemala to effect the refund, within five (5) working days following receipt of the Tax Administration's report.

The petition shall be deemed decided unfavorably, for the sole effect that the taxpayer may challenge it or resort to the next administrative instance, if after the time limit of thirty (30) working days for the quarterly period and sixty (60) working days for the semi-annual period, counted from the filing of the request with the complete required documentation, the Tax Administration does not issue and notify the respective decision.

The Tax Administration may reject in whole or in part the refund requests, in the event that there are adjustments notified to the taxpayer for the tax to which this law refers; and only up to the amount of such adjustments.

When there are indications that an exporter or taxpayer selling goods or rendering services to persons exempt from the tax has altered the information or has unlawfully appropriated the tax credits, the Tax Administration shall refrain from refunding the requested tax credit, and shall proceed to file the criminal complaint as provided in articles 70 and 90 of the Tax Code.

Taxpayers engaged in exportation who have opted for the regime established in the preceding article may change to the regimes indicated in Articles 23 “A” and 25 of this law, provided that they do so in advance of the beginning of the following tax period.

For purposes of the regime established in the preceding articles, professionals in Public Accounting and Auditing shall proceed as follows:

1)Public accountants and auditors who provide their services independently:

a)To submit an application for registration and authorization to issue opinions on the admissibility of the refund of tax credit, before the Register of Public Accountants and Auditors of the Tax Administration, indicating their general information, Tax Identification Number, membership number, fiscal domicile, place where they will carry out their professional activity and place to receive notifications. Said application shall be made by means of the form provided for such purpose by the Tax Administration.

b)To submit a sworn statement declaring that they have not been convicted of crimes against property, against the tax regime, or crimes against public faith and national patrimony.

c)To attach a photostatic copy of the professional degree.

d)Certificate accrediting them as an active collegiate member of the professional association to which they belong, at the time of their registration.

e)Certification issued by the professional association of which they are an active collegiate member, in which it is stated that the public accounting and auditing professional has not been sanctioned by the tribunal of honor of the professional association issuing the certification.

2)Public accountants and auditors who provide their public accounting and auditing services through a legal person or who work in an employment relationship for the latter, in addition to the requirements established in the foregoing subparagraphs, shall indicate:

a.The name or corporate name of the legal person to which they provide their services;

b.Fiscal domicile of the aforementioned legal person;

c.Tax Identification Number of the firm or entity through which they provide their professional services or maintain an employment dependency relationship.

Once the professional is registered, they shall notify the Register of Public Accountants and Auditors of the Tax Administration of any change in their information, and submit within the first three months of each year the respective certificate accrediting them as an active collegiate member of the professional association to which they belong, as well as the certification indicated in number 1, subparagraph e) of this article.

The registration of Public Accountants and Auditors who do not comply with the registration requirements established by this law shall be cancelled, without prejudice to the determination of civil and criminal liabilities arising from their actions.

Notwithstanding the foregoing, the professional associations in which public accountants and auditors are registered as members shall send monthly to the Tax Administration a list in electronic medium of the professionals who are active to practice the profession.

Taxpayers engaged in the export of goods, and taxpayers engaged in the export of services who pursuant to Article 23 of this Law are entitled to the refund of tax credit, may request from the Tax Administration the refund of one hundred percent (100%) of the remainder thereof. The refund shall be made for elapsed monthly tax periods.

The Superintendency of Tax Administration shall keep a register of exporters qualifying for this regime.

Exporters may opt for the refund regime established by this article, previously complying with the following:

1.To demonstrate their status as exporter, in accordance with one of the following conditions:

a.That fifty percent (50%) or more of their total annual income for the prior calendar year is allocated to the export of goods or to the export of services.

b.That having a percentage of export of goods, or of export of services, of less than fifty percent (50%) of their total annual income for the prior calendar year, they cannot offset the tax credit against the tax debit received from their local sales.

Exporters shall update this information annually before the Tax Administration.

2.To be incorporated into the Online Electronic Invoice Regime -FEL-, in accordance with the provisions that the Tax Administration has in force.

3.To use an electronic system for recording operations and supporting documentation for all operations in the ordinary course of the taxpayer's business and for the tax credit claimed. This system shall include: 1. Inventory book; 2. Book of first entry or journal; 3. Ledger or centralizing book; 4. Financial Statements books; 5. Purchase and sales books; 6. Other books or auxiliary reports required by specific laws or determined by the Superintendency of Tax Administration.

Non-compliance with any of these requirements shall give cause to the Tax Administration to reject the request and the taxpayer may claim the refund of tax credit under any of the other refund methods established by law. The Tax Administration, within a peremptory time limit of six (6) months, shall make available to taxpayers all corresponding electronic tools to comply with the provisions of this article, including a specific electronic platform for the management of the tax credit refund regime. This platform must allow, through electronic certifications, verification that the filing of the Definitive Export Declarations upon which the refund of the tax credit is claimed has been complied with. The regulation of the law shall establish the mechanisms, procedures and certification sources for exports of goods or services.

The taxpayer who opts to use this regime, using the electronic platform described, shall file the request for refund of the tax credit before the Tax Administration, which shall verify compliance with the certification and validation requirements and mechanisms, deciding within the time limit of thirty (30) days counted from receipt of the request on whether or not it is admissible. In the event that any mechanism, procedure or inconsistency in the certification source has been omitted and that motivates rejection of the request for refund of the tax credit, the Tax Administration shall set a time limit of thirty (30) working days for the exporting taxpayer to address the requirements of the Administration.

If the decision of the Administration is favorable, it shall forward, within the time limit of five (5) working days from issuance thereof, the decision to the Bank of Guatemala which, on the basis thereof, shall effect the corresponding refund. The refund of the tax credit shall be made by credit to the account at the bank designated by the exporter.

The foregoing does not limit the powers of the Tax Administration to verify and audit, a posteriori, the admissibility of the refunded tax credit and to take such actions as it deems appropriate, both administrative and criminal, in accordance with the provisions of the Tax Code.