Guatemala

Last modification: 28 Sep 18
Introduction: 

Guatemala is composed of 22 departments. They are Alta Verapaz, Baja Verapaz, Chimaltenango, Chiquimula, El Progreso, Escuintla, Guatemala, Huehuetenango, Izabal, Jalapa, Jutiapa, Peten, Quetzaltenango, Quiche, Retalhuleu, Sacatepequez, San Marcos, Santa Rosa, Solola, Suchitepequez, Totonicapan, and Zacapa.

The vast majority of the populace resides in the southern half of the country, particularly in the mountainous regions; more than half of the population lives in rural areas.

 

Thank you contributors of the Guatemala WikiFleet page:
BDO, ALD Automotive, Wheels Inc., Arrend Leasing

Chapter 1: Economic and business environment

Demographics

15.5 million people (July 2017 est.)

Guatemala is a predominantly poor country with a large indigenous population which is disproportionately affected. It is the most populous country in Central America and has the highest fertility rate in Latin America.

It also has the highest population growth rate in Latin America, which is likely to continue because of its large reproductive-age population and high birth rate. Almost half of Guatemala's population is under age 19, making it the youngest population in Latin America.

 

Capital

Guatemala City (population of 942,348 in 2002)

Major cities

1. Guatemala City (942,349 in 2010)
2. Mixco (384,428 in 2002)
3. Villa Nueva (301,947 in 2002)
4. Quatzaltenango (120,496 in 2002)

5. San Miguel Petapa (94,228 in 2002)

Languages

Spanish (official) 68.9%, Maya languages 30.9%

GDP

US$70.8 billion (2017 est.)
US$4,567 per capita

Unemployment rate

2.3% (2017 est.)

Main industries

sugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, tourism

Agriculture
sugarcane, corn, bananas, coffee, beans, cardamom; cattle, sheep, pigs, chickens

Currency

 Guatemalan Quetzal (GTQ)

Interest rate

benchmark interest rate 2.75% (2018)

Inflation

3.79% (2018 est.)

Chapter 2 : Automotive market, segments & sales

Total Car park

2017

3.5 million vehicles, approximately
one vehicle per 4.5 inhabitants (including passenger cars, trucks, motorcycles, etc.)

 

New vehicle registrations (Cars, LCV, Trucks)

Approximately 28,953 in 2017, down 5.7% year-over-year from 39,700. 

Top 5 brands (total market)

2017, new vehicle registrations

1. Toyota (5,155)
2. Kia (2,427)
3. Hyundai (2,358)
4. Nissan (1,580)
5. Mazda (1,362)

 

Dealer network (including fleet dealer network)

Top 5 Dealerships (2017)

1. Cofiño Stahl y Cìa. (5,924 units sold)
2. Auto Kia  S.A. (2,427 units sold)
3. Universal De Autos  S.A. (2,387 units sold)
4. Motores Panamericanos  S.A. (1,580 units sold)
5. Central Motriz  S.A. (1,226 units sold)

Chapter 3: Company car market

Total Fleet Park (company cars)/Fleet penetration in total fleet sales

100,000 in 2017 (3.07% of total car park)
95,000 in 2016 (2.96% of total car park)
80,000 in 2016 (2.63% of total car park)

Gasoline (87.0% of market)
Diesel (11.6% of market)
Other (1.4% of market) 

 

Top 5 fleet brands (fleet market)

2017

1. Toyota (26% of market share)
2. Hyundai (8.3% of market share)
3. Kia (10.4% of market share)
4. Nissan (7.1% of market share)
5. Isuzu (5.4% of market share)

Premium Market

1. BMW (27% of the market share)
2. Audi (24% of market share)
3. Mercedes Benz (21% of market share)
4. Land Rover (12% of market share)
5. Porsche (6% of market share)

 

 

Chapter 4: Taxation & legislation

 

Guatemala

The basis of company car taxation in Guatemala is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any.

 

 

La base de los impuestos a los automóviles de las empresas en Guatemala se refleja en este resumen. Aquí se consideran diferentes tipos de impuestos: impuestos relacionados con el registro del vehículo, impuestos sobre la renta y aspectos del IVA. Los desarrollos futuros esperados también se enumeran brevemente, si corresponde.

 

1. Car taxation

1.1. Registration tax

 

Taxable event

 

 

 

 

 

Taxable person

 

 

 

Tax due

 

 

 

 

Taxable period

 

Vehicle registration tax rates depend on the type of vehicle, attached file ANNEX I that contains the different tax rates for each type of vehicle.

 

Determination of the tax base:

 

The tax base for the Specific Tax on the First Registration of Land Motor Vehicles for use is the value recorded in the original invoice issued by the seller of the vehicle abroad, which complies with the requirements established by law. the country of issue and that the authenticity of said invoice can be verified by the Tax Administration, in addition to presenting the title of ownership of the vehicle issued by the competent authority of the country from which it is exported and documenting the payment of the invoiced value, by the means made available by the national and international banking system.

 

In the case of not complying with what is required in the previous paragraph, the taxable base will be the value of the vehicle that appears in the table of taxable values ​​that the Superintendence of Tax Administration must prepare annually (ANNEX II attached), which must be approved by the Board of Directors, Superintendence and published in the official newspaper and on the website of the Tax Administration, in the month of November of each year.

 

For new land vehicles, assembled or manufactured abroad, the tax base is the import value defined as the addition of insurance and freight to the value of the vehicle, reported by manufacturers or importers.

 

In the case of new land vehicles, assembled or manufactured in Guatemala, the tax base is the value of the vehicle consigned in the invoice issued by the assembler or the manufacturer.

 

The model year of the land vehicles, will be determined by verification of the Vehicle Identification Number (VIN), which must physically consist of vehicles entering the national territory and exactly match the import documents

 

 

1.2. Annual circulation tax

Taxable event

 

Taxable person

 

Tax due

 

 

Taxable period

The annual vehicle circulation tax depends on the type of vehicle and its characteristics, for reference the attached file ANNEX II contains the detail of the types of vehicles, their characteristics and the tax that corresponds to them.

2. Income taxes

The Law establishes two forms of payment of Income Tax, taxpayers can register with the Tax Administration in one of the following two methods:

 

1. Regime on Profits of Lucrative Activities of 25%

2. Regime on Income from Lucrative Activities of 5% to 7%, depends on the amount of gross income that you obtain monthly.

 

 

3. VAT

3.1. Hire purchase

ü 12% on the purchase price.

 

3.2. Leasing

ü 12% on the value of the lease.

 

4. Company car

4.1. VAT due on private use of company cars

ü 12%

5. Income taxes – drivers’ personal taxation

If a person is engaged in the business of buying and selling vehicles or providing taxi services, the income tax that must be paid depends on the tax regime in which it is recorded:

 

1. Regime on Profits of Lucrative Activities of 25%

2. Regime on Income from Lucrative Activities of 5% to 7%, depends on the amount of gross income that you obtain monthly.

 

The personal use of vehicles does not have tax benefits, only fiscal obligations.

 

6. Electric vehicles

For the importation of electric vehicles: 12% Value Added Tax and 5% First Registration Tax.

 

 

 

 

Source: BDO 

Chapter 5: Car policies

First of all, to drive in Guatemala, foreign visitors must have a full driver license valid in their countries of residence. Foreign driver licenses are accepted for the first 30 days. It is recommended to have an International driving permit as International driving permits are accepted for longer stays. To rent a car in Guatemala, each driver must be at least 25 years old and have one year of driving experience. Driving is on the right hand side of the road.

·        The minimum driving age is 18 years.

·        Seat belts when driving are mandatory.

·        The use of a mobile phone while driving is prohibited, the exception is cell phones with a hands-free systems.

·        Turning right on red is not permitted.

·        Drivers must yield when entering a traffic circle.

·        The permitted blood alcohol level is 0.08%.

 

Chapter 6: Funding methods

Financing is more common for the "B" or "C" segments as those acquiring premium cars commongly buy them outright or opt for more sophisticated tools such as leasing (sometimes with an option to buy). The latter is also common for those acquiring fleets for companies.

Characteristics of financing

· New vehicle terms: 12-72 months
· Used vehicle terms: 12-60 months
· New vehicles: 8.6%/y variable interest rate when financing in Guatemalan quetzales.

· New vehicles: 7.25%/y variable interest rate when financing in US dollars.
· Used vehicles: 12.6-16.6%/y variable interest rate when financing in quetzales.
· Used vehicles: 9%/y variable interest rate when financing in US dollars

There is a lot of red tape stemming from the Motor Vehicle Importers and Distributors Association (AIDVA) so keep in mind that it may be difficult to acquire financing for some.

Requirements - Individuals
· Payment plan (including financing)
· Debtor's credit application and IR Form
· Proof of recent income on letterhead
· Full and legible photocopy of personal ID
· Legible photocopy of the NIT (RTU) tax registration card
· Photocopy of a water, electricity or telephone bill
· Photocopy of License (If you are an Individual merchant)
· Photocopy of Active Collegiate Card (For Professionals)


Requirements - Companies

· Payment plan (including financing)
· Company credit application
· Financial Statements from the two most recent fiscal periods, signed by Legal Representative and Accountant.
· Account statements from the last 3 months (If you are not a BI Account Holder)
· Trade License
· Business License
· Full photocopy the Legal Representative’s personal ID
· Photocopy of incorporation certificate
· Photocopy of legal representative

Requirements - Legal Representative
· Copy of the NIT tax registration card of the company
· Copy of the latest Water, Electricity or Telephone bill
· Form IVE-IR-02 for Legal Entity

Chapter 7: Fuel

Average gasoline price per liter: US$0.98
World average: US$1.17
(est. August 1, 2018)

Chapter 8 : TCO components

As Guatemala and some of its Central American neighbors (El Salvador, Honduras) have some of the worst vehicle accidents rates in Latin America, implementing driver training and making sure your cars are in top shape are key to controlling TCO.  

Chapter 9: Safety, insurance and telematics

Safety

Balancing safety with other factors is key in selecting your fleet vehicles and one assessment tool to use in Guatemala as well as most of Latin America is regional car safety assessment program Latin NCAP. Founded in 2010, Latin NCAP is one of the latest additions to the NCAP family. The original NCAP (new car assessment program) was established in 1978 in Washington DC.

Meanwhile, the lack of security when using public transportation in Guatemala and surrounding countries actually makes buying a car a necessary investment in order to assure personal safety in many cities, according to Arrend Leasing CEO and Global Fleet Latin America advisory board member Mirella Juarez.

Insurance

A vast majority of cars in Guatemala are not insured. Following a 2013 study showing that only about 14% of the vehicles in the country were insured beyond obligatory coverage, Spain-based insurance company Mapfre launched an insurance policy for 2009-14 vehicles aimed at filling the gaps in insurance coverage.  

Telematics

Despite Guatemala's total car park being one of the oldest in the region, its corporate car fleets remain quite new, some of which use telematics primarily for improving operational efficiency and to maintain safety.  

Chapter 10: Environment

Although importing vehicles more than 10 years old is not permitted, it is not really enforced. As such, a gas emission regulation is urgently needed to help prevent the entry of vehicles coming from the United States which are considered scrap metal or banned due to their high levels of pollution.

Electric Vehicles

Several full-electric motorcycles, cars, and cargo vehicles are offered in the country. However, according to data from the tax administration office SAT, electric vehicles represent less than 2% of Guatemala’s total car park.

Among the established brands in the local market are France’s Renault, China’s Luka, and smaller companies such as Volta and Grupo Cormosa.


 

Chapter 11: Mobility

The most common mobility options in Guatemala City are bus, the six-line Transmetro system, taxi, and Uber.

Fares

Bus: 1.20 quetzeles
Transmetro: 2 quetzeles
Taxi: 5 quetzeles + 5 quetzels per kilometer
Uber: 5.25 quetzales + 2.30 per kilometer (Uber pool available for those wanting to save mone

Among the other options available are inDrive where the commuter suggests the price he or she wants to pay for a ride, VIT which is a network of various taxi services, Urban Park Pink which offers rides only for women, and bike sharing systems.

Chapter 12: Key trends to watch