provisionally-largely-compliant

Guatemala

To see the determinations and rating of all published reports click here.

Overall rating is Provisionally Largely Compliant

Guatemala has been reviewed under the fast-track procedures and assigned provisional overall rating. Guatemala will be scheduled to undergo a full review under the strengthened 2016 Terms of Reference in the near future.

Table of Determinations and Ratings of the Supplemental Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Although the issuance of bearer shares has been abolished in Guatemala and the conversion process terminated in June 2013, due to the reinstatement court procedure for future reinstated bearer shares, there is a slight risk that ownership information for all holders of bearer shares may not be available.  Guatemala should take further steps necessary to ensure that appropriate reporting mechanisms are in place to effectively ensure the identification of the owners of bearer shares in all cases.  
There is no provision requiring foreign companies with sufficient nexus with Guatemala to provide ownership information.  Guatemala should ensure the availability of ownership information of all foreign companies with sufficient nexus to Guatemala. 
Ownership and identity information on foreign partnerships may not be available in Guatemala, even when the foreign partnership carries on business in Guatemala or has income, deductions or credits for tax purposes in Guatemala.  Guatemala should ensure that information that identifies the partners in a foreign partnership that carries on business in Guatemala or has income, deductions or credits for tax purposes in Guatemala is available to its competent authority. 
Ownership and identity information on the settlor and beneficiaries of a foreign trust may not be available in Guatemala.  Guatemala should take measures to ensure that information is available that identifies the settlor and beneficiaries of foreign trusts. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is not in place.   The power of Guatemalan tax authorities to obtain information for exchange purposes is limited by professional and banking secrecy which cannot be lifted for exchange of information purposes.  Guatemala should ensure that its limitations on access to information do not prevent effective exchange of information in tax matters. 
Article 98 of the Tax Code authorizes the SAT to obtain information that forms the basis of a tax obligation, and it is not clear that this power applies for exchange purposes in the absence of a domestic tax interest.  Guatemala should ensure that it has the power to obtain information for exchange purposes regardless of a domestic tax interest. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Where a judicial order is needed to obtain information, the taxpayer must in all cases be notified. While a draft bill introducing an exception to this notification procedure was introduced to parliament in August 2013, this has not yet been approved.  Guatemala should introduce exceptions to this notification procedure where notification would unduly prevent or delay effective exchange of information. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is not in place.   Guatemala has domestic law limitations including confidentiality of documents, bank and professional secrecy and a possible domestic tax interest requirement which prevents Guatemala from giving full effect to its EOI mechanisms.  Guatemala should ensure the access to all relevant information for tax purposes in accordance with the standard. 
Guatemala should ensure the access to all relevant information for tax purposes in accordance with the standard.  Guatemala should ensure that its EOI agreements are ratified expeditiously. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is not in place.   Guatemala does not have any EOI mechanisms in force to the standard.  Guatemala should ensure that it gives full effect to the terms of its EOI arrangements in order to allow for full EOI to the standard with its relevant partners. 
  Guatemala should continue to develop its EOI network with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.