The 24 verifications that must be carried out before submitting it to the SAT – 2024-02-20 13:46:27

In Guatemala, December 31 was the last day of the fiscal year, so now taxpayers subject to income tax (ISR) must prepare the accounting information that will serve as the basis for the annual return presented in the first quarter. as well as for the financial statements that must be attached.

Likewise, it is necessary to meet the requirements of the regime in which the company, entity or taxpayer is registered, for which 24 reviews are presented that should not be overlooked, according to the experts consulted:

Regime on profits from lucrative activities

This regime is known as Rual and the rate is 25% of taxable income, so these aspects must be taken into account:

1. Confirm in the Unified Tax Registry (RTU) which ISR regime the taxpayer is registered for.
2. Then confirm that all obligations have been fulfilled correctly.

• Compliance Verification:

3. Ensure that the quarterly returns for January-March, April-June and July-September 2023 are submitted and that the corresponding tax has been paid.
4. In addition, the income statement must be compared with the income and expenses presented in each of the quarters.
5. Review the accreditation of solidarity tax (ISO) for periods prior to quarterly payments and what balance might be credited in the period that includes the annual closing.
6. Reconcile sales with what was reported in the value added tax (VAT) declarations to determine if what was recorded in the accounting records is correct.
7. If there are operations with related parties, the Transfer Pricing Study must be carried out and the results are attached to the ISR sworn declaration.

• Income and other reviews:

8. Review which are the taxable income, the exempt income and the capital income.
9. Determine if there is any income that corresponds to capital gains on the sale of assets that are not part of the normal business of the company, since these income are separated from the regime of profitable activities.
10. Reconcile capital income income, check that it has been recorded properly and that the corresponding income tax has been paid.

• Records and classification of expenses:

11. Taxpayers must check that their records are properly accounted for in accordance with local and external purchases, sales, imports, payrolls, contracts and others.
12. Confirm that all expenses that are going to be reported as deductible are deductible (as they are part of the normal business of the company) and that they are duly documented, in accordance with the law.
13. Ensure that expenses that are not deductible are not being deducted, as specified in articles 21, 22 and 23 of book 1, of decree 10-2012 and its amendments. These define what expenses are deductible, their limits and how they should be documented.

14. It must be accomplished by taking a physical inventory as of December 31 and leaving a record of it with a detail of units, type of product, unit cost or the total value of the inventory.
15. Check that the inventory report corresponding to June has been submitted (in the previous July). And present the one corresponding to December in January 2024.

16. Note that if these are special taxpayers and withholding agents qualified as such by the SAT, duly audited financial statements must be presented.
17. The audited financial statements that must be attached to the ISR Affidavit must be signed by the accountant and the legal representative, apart from the opinion of the duly certified Public Accountant and Auditor.

• Annual declaration and settlements:

18. The last date to submit the ISR tax return for the regime on profits from lucrative activities corresponding to fiscal year 2023 is March 31, 2024.
19. Furthermore, in January of each year, in this case 2024, employee income tax settlements must be submitted, while the reconciliation is declared in February.

Simplified optional regime on income from lucrative activities

In the case of the simplified optional regime on income from lucrative activities, the ISR rate is 5% and 7% on the affected income. In this case, the following recommendations and obligations must be met:

20. Reconcile the affected and exempt sales with the monthly statements to determine if there is any difference with what was paid.
21. Submit an ISR sworn declaration with financial information on assets, liabilities and capital, income and expenses. This statement is considered informational.
22. Verify if you have been notified as a VAT withholding agent, or if the SAT has required audited financial statements.
23. If there are operations with related parties, prepare and present the Transfer Pricing Study.
24. In December, taxpayers can change their ISR regime depending on their income and expense situation. If you did not do it in that month, it cannot be done now and you must continue throughout 2024 in the same regime that you had in 2023.

Fuentes: Auditor Juan Carlos Paredes, managing partner of the firm Paredes, Saravia y Asociados, SC (Parsa); Auditor Mario Coyoy, Tax partner at the Deloitte firm and Coordinator of the Tax Commission of the Guatemalan Institute of Public Accountants and Auditors (IGCPA).

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