If you are planning on doing business in Guatemala that involves trading in goods or contracting services, getting your invoicing right is going to be important. Because failing to meet invoicing requirements for a foreign company in Guatemala will affect your company’s good standing in the eyes of local authorities and could result in fines or other legal inconveniences, diminshing your chances of success in this dynamic and growing market.
Guatemala has seen continuous growth in gross domestic product (GDP) in recent decades, reaching $76.7 billion in 2019 (all figures in USD). The country has experienced a corresponding rise in prosperity among the population, with gross national income (GNI) hitting $8,870 that same year.
A member of the so-called Northern Triangle alongside El Salvador and Honduras, Guatemala occupies a strategic geographical location between those two countries and Mexico. Meanwhile, major ports on both its Pacific and Caribbean coasts contribute to Guatemala being a logisitcal hub for Central America, accountign for 30% of all good that pass through the subregion.
Guatemala’s biggest exports are oil and gas, bananas, coffee, sugar, and non-precious metals. The largest recipients of goods from the country include the United States and China, as well as Mexico, El Salvador, and Panma.
Or feel free to contact us now to discuss your market entry options in Guatemala, or elswehere in Latin America and the Caribbean.
How does invoicing work in Guatemala?
In 2018, Guatemala introduced a new online electronic invoicing system, known as “FEL” for its Spanish acronym, as mandatory for all Guatemalan taxpayers, including foreign companies operating in the country. This new process has been set up for taxpayers to securely issue invoices and other electronic tax documents (ETD) using online authorization.
To use FEL, you will need to register yourself within the Superintendency of Tax Administration (SAT), with the process requiring you or someone who represents you to be proficient in Spanish.
As a business based in Guatemala, you will be issued a VAT number and be obliged to submit periodic VAT reports, with submissions usually due on a monthly basis.
Who are the parties involved in the new Electronic Invoice modality?
- Issuer: The person or organization issuing the electronic invoice or any other electronic tax documents (DTE).
- Certifier: An entity authorized by the SAT to review and certify the electronic invoices dispensed by the issuer.
- Receiver: The person or organization purchasing the good or services.
- SAT: Verifies and receives the electronic invoices and other certified tax documents in order to validate them.
What are invoicing requirements for foreign companies in Guatemala?
In order to comply with invoicing requirements for a foreign company in Guatemala, according to articles 29 and 30 of Government Agreement 5-2013, legal entities operating in the country must issue invoices that meet the following criteria:
- It is clearly marked as an “invoice”
- It has a unique, sequential number
- It includes the date of issuance
- It includes the supplier/issuer data (company name, address, tax identification number — TIN)
- It includes the customer data (address, TIN, and other data if available)
- It has a full description of goods and/or services provided
- It mentions any discounts if applicable
- It includes the rate and amount of VAT applicable for the category of goods and services provided
- It includes the invoice total (incl. VAT)
- It lists an authorization number issued by SAT
- Any relevant term of validity must be included
- In the case of specialist products, you may hav to include additional information
If you do not comply with all of these requirements, you will be liable for a fine equivalent to the corresponding tax burden of the transaction.
Understand invoicing requirements for a foreign company in Guatemala with expert support
At Biz Latin Hub, our multilingual team of accounting and taxation specialists is ready to assist your entry into the Guatemalan market. With our full suite of legal, HR, commercial representation, and tax advisory services, we are equipped to help you achieve your commercial goals in Guatemala, as well as in any of the other 15 countries across Latin America and the Caribbean where we are present.
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