Understanding Guatemala Nexus Rules
Updated 3 months ago
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Nexus determines whether your business has a tax obligation in Guatemala. Kintsugi monitors three types of nexus for Guatemala: physical nexus, economic nexus, and collected tax nexus.
Physical Nexus
Your business has physical nexus in Guatemala if any of the following apply:
Scenario | Creates Nexus? |
|---|---|
Company is legally incorporated in Guatemala | Yes, immediate obligation |
Fixed place of business in Guatemala (branch, office, or warehouse) | Yes, immediate obligation |
Permanent employees in Guatemala with authority to make or bind sales contracts | Yes, immediate obligation |
Remote employees in Guatemala with no sales authority (e.g., developers or admin staff) | No |
There is no revenue threshold for physical nexus. Registration is required before or upon the first taxable supply.
Economic Nexus
Guatemala does not set a revenue threshold for economic nexus. The rules are simple:
Resident businesses (with physical presence in Guatemala): VAT applies from the first taxable transaction, regardless of revenue.
Non-resident businesses (without physical presence): VAT applies from the first taxable supply to Guatemalan consumers (B2C). If all sales are B2B and the Guatemalan buyer self-assesses via reverse charge, non-resident businesses may not need to register.
A local tax representative is required for non-resident businesses registering for VAT in Guatemala.
Collected Tax Nexus
If your business has collected VAT from Guatemalan customers without first meeting physical or economic nexus, you still have a tax obligation. Under Guatemala's VAT law (Decreto 27-92), anyone who collects VAT on taxable supplies automatically becomes a VAT taxpayer, regardless of whether they are formally registered with SAT.
IMPORTANT: If your business begins as a B2B-only supplier and later starts selling B2C services, you will be required to register for VAT. Once registered, all subsequent supplies (whether B2B or B2C) are subject to the 12% VAT.
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