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6.1. Main Rules Governing the Determination of Taxable Income

Guatemala applies two tax regimes, namely (a) a standard regime, and (b) an optional regime. Under the standard regime, net taxable income is determined as gross revenues less exempt foreign income, less passive income taxable separately, less deductible expenses and allowances including local taxes but excluding the corporate tax and VAT. Under the optional regime, taxable income is determines as gross revenues less exempt (foreign) income and no deductions are allowed.