Before you launch your business in Guatemala, important research must be done. Proper invoicing is crucial, particularly when it comes to trading goods or contracting services. Failure to comply with invoicing requirements could negatively impact your company’s reputation with local authorities, and result in fines or other legal issues, hindering your chances of success in this flourishing market. Understanding the invoicing requirements for a foreign company in Guatemala should be one of the first steps you take.
Guatemala has seen continuous growth in the gross domestic product (GDP) in recent decades, reaching $85.99 billion in 2021 (all figures in USD). Despite the challenges posed by the pandemic, Guatemala’s economy recorded an impressive 8% growth rate from 2020-2021, which has led to a corresponding increase in prosperity among the population, with GDP per capita reaching $5,025 in the same year. These positive figures are supported by significant levels of Foreign Direct Investment, with over $3.5 billion invested in the country in 2021 alone.
Guatemala, a part of the Northern Triangle along with El Salvador and Honduras, holds a key geographical position between these nations and Mexico. Additionally, its Pacific and Caribbean coast ports play a significant role in making it a logistics center for Central America, responsible for a whopping 30% of all goods transported through the sub-region.
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 Panama.
Whether you are already doing business in the Guatemalan market or planning to expand here, read on to find out about invoicing requirements for a foreign company in Guatemala.
Or feel free to contact us now to discuss your market entry options in Guatemala, or elsewhere in Latin America and the Caribbean.
How does invoicing work in Guatemala?
Starting in 2018, Guatemala mandated that all taxpayers, including foreign companies conducting business in the country, must utilize the new online electronic invoicing system known as “Factura Electrónica en Línea” (more commonly referred to by its acronym, “FEL”). This system enables taxpayers to securely issue invoices and other electronic tax documents (ETDs) through online authorization.
To use FEL, you will need to register yourself with the Superintendency of Tax Administration (SAT). Either you or your legal representative must 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 document (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?
To comply with invoicing requirements for foreign companies in Guatemala per Government Agreement 5-2013 (articles 29 and 30), legal entities must issue invoices meeting these 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
Non-compliance with these requirements results in a fine equal to the corresponding transaction’s tax burden.
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. We offer a complete range of legal, HR, commercial representation, and tax advisory services. We have a track record of helping companies succeed in Guatemala, and 15 other countries throughout Latin America and the Caribbean.
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