In Guatemala, companies that carry out transactions with related parties must comply with specific transfer pricing regulations to ensure that these operations are carried out in accordance with the arm’s length principle. Below, we present the main obligations and key dates that companies should consider.
Obligations and Due Dates in Guatemala
The main transfer pricing obligations and their respective compliance deadlines are detailed below:
| Type of Obligation | Due Date |
| Affidavit | Until March 31 of the year following the end of the tax year. |
| Local File | Subject to the requirement of the Tax Administration. |
| Master File | Not applicable. |
| Country by Country Report | Not applicable. |
Companies that carry out intercompany transactions must ensure that they comply with these obligations in order to avoid penalties and guarantee regulatory compliance.
Transfer Pricing Affidavit
The Local File in Guatemala must be submitted by March 31st of the year following the end of the tax year. This document must include detailed information on transactions carried out between related parties, with the aim of demonstrating that they have been agreed under market conditions.
In accordance with Article 64 of the Regulations of the Tax Update Law, taxpayers who carry out transactions with related parties must attach to their annual Income Tax return an annex with detailed information on these transactions “Annex to the Informative Affidavit on related parties”.
In accordance with the provisions of Decree Number 10-2012 of the Congress of the Republic. Article 65 of this law states that “Taxpayers must have, at the time of filing the Income Tax Return, sufficient information and analysis to demonstrate and justify the correct determination of prices, the amounts of consideration or the profit margins in their transactions with related parties, in accordance with the provisions of this book”. This information must be contained in a Local File.
Local File
Unlike the Informative Affidavit, the Local File only has to be submitted if requested by the Tax Administration. This report goes into more depth in the analysis of the local entity’s transfer pricing, providing additional information on the methodology used, the comparables applied and the justification of market values.
Non-existence of the Master File and Country by Country Report
Unlike other jurisdictions that have adopted the OECD guidelines in their entirety, Guatemala does not require the filing of a Master File or a Country by Country Report, which reduces the administrative burden for multinational companies operating in the country.
Implications for Companies
It is crucial that companies with intercompany operations in Guatemala maintain adequate documentation to respond to any request from the Tax Administration. In addition, they must be prepared to justify their transactions with related parties in accordance with the transfer pricing methods established in Guatemalan regulations.
It is important to highlight that Article 65, paragraph 2, of Decree Number 10-2012 establishes that “The taxpayer must provide the documentation required by the Tax Administration within twenty (20) days of receipt of the request. This obligation is established without prejudice to the Tax Administration’s power to request any additional information it deems necessary for the exercise of its functions”
Conclusion
Companies in Guatemala must ensure that they comply with their transfer pricing obligations and maintain clear and accurate documentation. The correct application of these requirements not only minimizes tax risks, but also improves transparency and regulatory compliance.
Get advice from TPC Group!
At TPC Group, we are specialists in transfer pricing and provide expert advice to help your company comply with tax regulations in Guatemala. Our team is prepared to help you prepare the appropriate documentation and avoid tax risks.
Contact us today for a personalized consultation and optimize your tax strategy!
Sources:
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Ministério da Fazenda da Guatemala - Decreto 10-2012 https://www.minfin.gob.gt/images/downloads/leyes_acuerdos/decreto_10_2012.pdf
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Superintendencia de Administración Tributaria (SAT) da Guatemala - Guia de Preços de Transferência https://portal.sat.gob.gt/portal/precios-de-transferencia/