Considerations on Tax Penalties in Guatemala

By: Mario Estuardo Archila

In tax matters it is customary to apply a penalty automatically, by “default”. In a cold and objective manner. However, this position should be rejected, since there are external elements that would make the sanctioning rule inapplicable, if we really understand that we are in a system of law.

One of the main reasons for not applying a penalty to a taxpayer is when the taxpayer acts following a declaration of the tax authority itself. In this case, it is not that he acts in respect to a binding consultation, but that he acts because an employee or official of the tax administration indicated that it was possible to do something or that the criterion of the administration was in that sense. Our legislation, the Tax Code and the CAUCA and RECAUCA, for example, transfer the liability for violations to the employees and officials who acted within their functions and caused those violations. However, we have seen little enforcement.

A second case -from the same group as the previous one- will be the one in which an “institutional criterion” is issued, but then, it is modified. The “new” criterion may be applied for the determination of the obligation and in tax audits; however, the taxpayer who acts with respect to the previous criterion in the periods in which it was in force should not be penalized. The person sanctioned should, in any case, be the official who authorized and published such criterion.

A third situation that should not imply a penalty for the taxpayer is when it acts following judicial precedents. This means one or several rulings, even if they do not form legal doctrine. This action in accordance with such precedents should prevent the application of a penalty, mainly because such precedents should be mandatory for the Tax Administration -art 98 of the Tax Code- and because it implies that there is no intention to act incorrectly, but, on the contrary, to comply with the interpretation that the courts of justice have given to the rules involved.

Thus, in sanctioning matters, a less objective position should be taken with respect to the application of the sanction, in order to analyze the subjective context and determine if there is a true participation of the taxpayer in the act that deserves to be sanctioned.