Decree 17-2025: “Law to facilitate compliance with tax refunds” in Guatemala

On November 18, 2025, the Congress of the Republic approved Decree 17-2025, “Law for the Facilitation of Tax Refund Compliance,” which reforms provisions of the Tax Code, the Value Added Tax Law, and the Law on Legal Provisions for the Strengthening of Tax Administration. The main modifications seek to:

• • Streamline the deadlines and procedures for the refund of excess or undue payments.
  • Expand and organize the VAT tax credit refund system, including those who sell or provide services to exempt people.
  • Create a specific account at the Bank of Guatemala to secure the resources allocated for refunds.
  • Establish clearer rules for the refund of tax credit balances derived from uncompensated withholdings.

The articles amended or added to the Tax Code are as follows:

1. 1. Article 99: The regulation of the current tax account system is amended to establish that taxpayers may authorize that, instead of receiving a refund of the balance in their favor, it be credited to the payment of taxes determined through future returns. Likewise, the deadline for making the refund has been reduced, which can now be done ex officio or at the taxpayer’s request within 30 days, instead of the previously applicable 60 days.
   2. Article 153: It is established that requests for refunds of Value Added Tax credit balances, withholdings that have been made to the taxpayer and that the taxpayer cannot offset, as well as interest, fines, and surcharges, shall be processed in accordance with the Special Procedure for Determining Tax Liability by the Tax Administration, regulated in Section Four of Chapter V of the Tax Code itself.
      
      Requests for refunds of undue payments shall be resolved without prior audit, except for verification of the payment made, its duplication, or any other circumstance that qualifies it as undue, and the corresponding resolution shall then be issued. In case of dispute, the provisions of the Special Procedure for Determining Tax Liability shall apply.
      
      If there is no dispute in the review, the Tax Administration will resolve the claim and forward the instruction to the Bank of Guatemala for crediting to the account, charging the specific account that has the necessary resources for this purpose.
      
      For the refund of the VAT tax credit, it is expressly stated that the procedure established in the Value Added Tax Law will be followed.
      
      In addition, it is reiterated that the taxpayer may request that the balance in their favor be credited to the payment of taxes determined through future returns.

I- From the Value Added Tax Law:

1. 1. Article 23: Amended to provide that taxpayers engaged in exportation and those who sell or provide services to exempt people in the domestic market, if they do not exhaust their tax credit with debits from their sales to other taxpayers, may request a refund of the tax credit. It also establishes that the tax credit shall not be refunded, among other cases, when the Tax Administration detects that the request shows signs of a possible crime.

1. 2. Article 23 “A”: Amended to establish that refund requests must be accompanied by invoices, eliminating the requirement that these be “originals.”

1. 3. Article 23 “B”: It provides that the Bank of Guatemala may create a special account called “Specific funds for the refund of VAT tax credits and other taxes,” which will be fed with at least 8% of the daily VAT revenue deposited in the Single National Account, and which may only be used to credit the reserve account of the banks in the system with the funds necessary for the tax refunds requested by the SAT.
      
      In addition, the Bank of Guatemala must report monthly, within 15 business days after the end of each month, to the Ministry of Public Finance and the SAT on the status of this account, the total refunded the previous month, and, for each taxpayer, their name or business name, TIN, amount refunded, bank that made the refund, and date of the transaction. If the percentage reserved is insufficient or excessive, the Ministry of Finance may make monthly adjustments to normalize the account balance. Finally, the Bank of Guatemala may deduct one-quarter of one percent (0.25%) of the amount refunded to cover the costs and expenses of administering these refunds.

1. 4. Article 25: The special tax credit refund regime is amended, providing that the Superintendency of Tax Administration shall keep a record not only of exporters, but also of those who sell or provide services to exempt people.
      This expands the special regime to allow tax credits to be refunded to taxpayers who sell or provide services to exempt people in the domestic market and who cannot offset such credits against the debits generated by their sales.

II- Legal provisions for strengthening tax administration

1. 1. Article 11: The treatment of tax with respect to withholdings is amended, establishing that suppliers who have had withholdings made on their sales or services and who, within a period of two consecutive years, have a remaining tax credit that cannot be offset against debits, may request a refund from the Tax Administration under the mechanisms established in the Tax Code.

III- Transitional provisions

It is established that all payment files that have been reviewed and approved by the Superintendency of Tax Administration and are pending payment by the Ministry of Public Finance must be addressed in accordance with budget availability.

Likewise, it is provided that the account established at the Bank of Guatemala shall be updated based on the provisions of Article 23 “B” of the Value Added Tax Law.