I know the title sounds strong; however, it is true. Amendments to the law in Guatemala have caused the legislative branch to steal our tax credit, resulting in obvious violations of the principle of neutrality, which we have previously discussed.
This is how the law originally stated, in Article 22:
Article 22. Tax Credit Refund.
The taxpayer with a remaining tax credit at the end of two consecutive tax periods may:
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- Request, with prior authorization from the Tax Administration, that the accumulated remainder for those periods is offset against any type of tax owed, including tax withholdings, interest, fines, and surcharges, collected by the Tax Administration.
- Request the Tax Administration to refund the remainder, provided that on that date, they do not owe any sums for the deferred taxes, interest, fines, and surcharges.
- Request the issuance of one or more tax vouchers applicable to the payment of any taxes or customs duties, provided that on that date, the taxpayer does not owe any sums for the deferred taxes, interest, fines, and surcharges. These tax vouchers will be issued by the Tax Administration to the bearer and will be negotiable.
Undoubtedly, completely consistent with the principle of neutrality, the wording of the norm allowed for the refund of the current tax credit.
In 1994, two years later, the article was amended as follows:
“Article 22. – Tax Credit Balance. The taxpayer’s tax credit balance resulting monthly from the declaration submitted to the Tax Administration must be carried over to the following tax period until exhausted through the offsetting of tax debts, and therefore, tax credit refunds will not be applicable. The exceptions are those cases referred to in Article 23 of this law.”
Here, it is established as offsettable ad infinitum, but the refund is eliminated.
In 2006, a new reform was introduced: Read more
