The Congress of Guatemala has approved Decree 17-2025, which contains the Law for Facilitating Compliance with Tax Refunds, a new regulation that amends key provisions of the Tax Code, the VAT Law, and the Law on Legal Provisions for Strengthening the Tax Administration.
The main objective is to accelerate the reimbursement of improper or excess payments and to optimize the VAT credit refund regime by introducing clearer rules, a more efficient procedure, and a dedicated funding mechanism to ensure the availability of resources for refunds.
Key changes approved
The new law introduces reforms that directly impact the tax management of exporters, government suppliers, taxpayers who sell to exempt entities, and companies with accumulated VAT credit balances.
The most relevant changes include:
- Shorter refund processing time: The Tax Code now requires the Tax Administration to process refunds, either automatically or at the taxpayer’s request, within 30 days, instead of the previous 60-day period.
- Option for automatic offsetting: Taxpayers may authorize the application of their credit balance toward future tax liabilities instead of receiving a cash refund.
- Special procedure for VAT credit balance reimbursements: Requests related to uncredited VAT, withholdings, interest, or surcharges will be processed under the Special Procedure for Determining Tax Obligations.
- Resolution of claims without prior audit: Refunds of improper payments will be resolved without an audit, except for verifying the payment, its duplication, or any circumstance that qualifies it as improper.
- Expanded VAT refund regime:
- Taxpayers who sell or provide services to exempt entities are expressly included, allowing them to request refunds when they cannot offset their VAT credit.
- The requirement to submit “original” invoices is eliminated.
Creation of a Dedicated Refund Fund
The Bank of Guatemala may administer the account “Specific Funds for the Refund of VAT Credit and Reimbursement of Other Taxes,” which will be funded with at least 8% of daily VAT revenue.
This account will ensure the availability of resources for refund instructions issued by the Tax Administration (SAT).
Transparency and monthly reporting
The Bank of Guatemala must report monthly to the Ministry of Public Finance and the SAT, providing details of the amounts refunded, including taxpayer-specific information.
Reimbursement of uncredited withholdings
Suppliers who accumulate VAT credit balances that cannot be offset for two consecutive years may request reimbursement under the special procedure established in the Tax Code.
