Guatemala to adopt Brazilian and Chilean platform for non-resident digital service providers
The Guatemalan Superintendency of Tax Administration (SAT) has proposed a voluntary regime for non-resident providers and marketplaces for digital services to register and report Value Added Tax. The current standard VAT rate is 12%. Any seller failing to register would have their receipts subject to a Withholding VAT.
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Adopting Brazil and Chile’s DEC IT platform
Guatemala is looking to adopt the Digital Economy Compliance IT platform, creating by a range of international organisations to help emerging economies to implement sound and efficient tax regimes for digital trade. It is already used in Brazil and Chile. This includes the voluntary registration regime, with the Withholding VAT net via payment providers to catch any missed transactions.
You can follow VAT Calc’s global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
What transactions are likely to be taxable
The following example electronic or digital services have been initially highlighted:
- streaming media service providers,
- cloud services providers,
- software-as-a-service providers,
- digital goods and services providers,
- providers of services through digital platforms, and
- providers of online advertising,
Withholding VAT on digital services
Many states around the world use payment provider Withholding VAT regimes, including Costa Rica and Cambodia. It obliges payment providers – banks, credit cards, e-wallets, online payment companies – to identify a payment to a foreign digital services provider, and split off the standard VAT rate element. It then pays this directly to the tax authorities. Payment providers may usually rely on publically available lists from their tax authorities to track which major foreign digital service provider is not VAT registered and therefore should be subject to Withholding VAT.
Guatemala has updated its payment platform, FEL, on 1 July 2021.
Central and South America VAT on digital services
| Comments (click for details) | Rate | Date | Threshold | Comments |
| Argentina | 21% | Apr 2018 | – | |
| Aruba | 4% | Jan 2023 | - | |
| Bahamas | 10% | Jan 2015 | BSD 100,000 | |
| Barbados | 17.5% | Dec 2019 | BBD 200,000 | |
| Bolivia | 13% | Nov 2022 | - | |
| Brazil | 26.5% | Jan 2026 | n/a | Regulations in parliament |
| Chile | 19% | Jun 2020 | Nil | |
| Colombia | 19% | Jan-18 | Nil | |
| Costa Rica | 13% | Oct 2020 | Nil | Withholding VAT option |
| Curaçao | 6% | 2020 | Nil | |
| Dominican Republic | 18% | 2025 | Nil | Currently withholding VAT |
| Ecuador | 12% | Sep 2020 | – | |
| El Salvador | 13% | 2022 | - | Replace Withholding VAT |
| Guatemala | 12% | TBC | ||
| Honduras | 15% | 2022 | HNL 250,000 | |
| Panama | 10% | 2022 | Withholding VAT | |
| Paraguay | 10% | Jan-21 | Nil | Withholding VAT; 4.5% DST |
| Peru | 18% | 2024 | Nil | Withholding VAT |
| Puerto Rico | 10.5% | Jan 2020 | $100,000; or 200 transactions | Marketplaces |
| Suriname | 10% | Jan 2023 | SRD 500,000 | |
| Uruguay | 22% | Jan 2018 | Nil | VAT and Withholding Tax |
