Guatemala Moves Towards Transparency In Banking

It's been a year since Guatemala's Decree 37-2016 - the Law for the Strengthening of Fiscal Transparency and Governance of the Superintendency of Tax Administration - came into effect, but there are still questions about it.

The law stipulates that the Tax Administration Office (SAT) may require any entity that is subject to surveillance by the Superintendent of Banks, including microfinance entities and non-profit microfinance entities, individuals or legal entities, to supply information on banking operations where the SAT considers there is reasonable doubt meriting an investigation process.

Guatemala calls this the "Liberation of Banking Secrecy", and sees the Central American country moving towards compliance with global regulation on financial transparency.

Although some taxpayers and entities eyed this move with suspicion, the requirement will only be processed by banking entities as long as the SAT has a judicial order. It is, however, worth mentioning that offshore entities are obliged to respond to SAT information on depositors and investors, and all movements must be detailed. Those who do not register one or several bank accounts that are in the name of a person or financial groups of the country, or foreigners, will be classified as "resistant".

Some experts suggest the best way for entities and taxpayers to deal with this new law is by documenting all movements in income.

Banking secrecy in Guatemala: FAQs

There are still some questions that many in Guatemala have about getting away from banking secrecy, here we take a look at them.

What is the procedure to register a bank account in a company's accounting?

Bank accounts must be noted in the inventory book, identified with the account number and the banking institution to which it belongs.

How should an investment be reflected in accounting?

Detail the exact amount of the investment, its type, specification and the institution to which it belongs, whether it is national or foreign - and, where the investment is foreign, the country where the account is located.

How should bank transactions be recorded?

All bank transactions must be backed up by a document, whether a deposit slip, transfer vouchers, invoices, promissory notes, bank reconciliations, and so on.

Is anyone exempt from registering their bank account?

The rules do not apply to...