Guatemala has introduced new regulations regarding leasing transactions through Decree no. 2 of 2021. This includes certain tax rules for leasing income as follows for the lessor:

• Interest, price differentials, factoring expenses, and other financial charges must be recorded as ordinary taxable income;
• Leased assets must be recorded in the balance sheet as accounts receivable and amortized over the term of the leasing agreement;
• Invoices must be issued to the lessee including the VAT charge; and
• Taxable income for the lessor is equal to the difference between the invoiced amount and the amortized amount.

Decree no. 2 of 2021 also includes certain tax rules for payments as follows for the lessee:

• Lease payments are considered a deductible expense;
• Leased assets must be recorded in the balance sheet based on the total value of the leasing agreement and amortized based on the payments made over a fiscal period;
• If the lessee exercises a purchase option, it must record the asset as the acquisition of a fixed asset and begin to amortize it, considering the applicable general tax provisions; and
• Interest, price differentials, factoring expenses, and other financial charges are recorded as a deductible expense.

Decree no. 2 of 2021 was published in the Official Gazette on 2 March 2021 and enters into force on 2 June 2021 (3 months after publication).