The scope of the transfer pricing rules is regulated in article 57 of the LAT. The aforementioned article establishes that the transactions or operations between related parties, transfer pricing rules will be applied to them provided that: a) they are carried out between a person resident in Guatemala and a person residing abroad regardless of whether said country is considered or not a “tax haven” and b) have an effect on the determination of the tax base, both in the period in which the transaction or operation is carried out, and in subsequent periods.

Article 38 of the LAT regulation establishes that a person resident in Guatemala is considered related to a resident abroad when both are united in their commercial, financial or service relations, for accepted or imposed conditions that differ from those that would be agreed upon. by independent persons and that are within the assumptions that the legal norm establishes to consider them linked or related.

So, in order for it to be considered a “related party”, in addition to being a resident abroad, it must be framed within the binding criteria that the Guatemalan norm regulates. Therefore, it is important to indicate that in Guatemala there are seven criteria that determine the relationship between the parties, the first six criteria are regulated by Article 56 of the LAT and 38 of the RLAT, which are given or applied:

1. For the control, direction or possession of one of the parties of 25% of the share capital or voting rights, even if they are relatives.

2. For the control or management of five or less persons of 25% of the share capital or voting rights in both related parties.

3. For belonging to the same business group for any of the following cases:

a) for being a partner or participant of the other.
b) by majority vote.
c) for having the power to appoint or dismiss members of the administrative body or for intervention by the legal representative.
d) by majority of the members of the management body of the dominated entity they are executives of the parent, among others.

4. For being an exclusive distributor or agent resident in Guatemala or abroad.

5. To the residents of Guatemala with their permanent establishments abroad.

6. To a permanent establishment in Guatemala and its parent company residing abroad.

Guatemalan legislation regulates a seventh case of linkage established in Article 60 of the LAT, which refers to the linkage in exports by the intervention of an intermediary who does not have his residence or does not devote himself in a wholesale manner to the activity of intermediation.

The operations to which the transfer pricing rules apply, as indicated, are all those carried out between related parties located in the Guatemalan territory and abroad, such as the sale of tangible or intangible goods, provision of services, financing, etc.

As part of the linking criteria, Guatemalan legislation regulates what is related to business groups and the control that one entity must exercise over the other to be considered linked. As established in article 38 of the RLAT, directing or controlling “is the power to influence or determine the key decisions of another person. Likewise, a person indirectly owns a share in the capital of another, when he owns a stake in the capital of an entity, which in turn owns one of that other. ”By virtue of the foregoing, in Guatemala, standards are contemplated that define what must be understood by "control" and "address" to be considered linked.

With respect to business groups, it is important to add that for the purposes of business groups their members may be natural or legal persons; or organizations with or without legal personality, that is to say that Guatemalan legislation allows business groups to be made up of people from any of the categories indicated above, including natural ones.