Alegalis’s Mildred Almengor explains Guatemala’s fuel tax exemption

Guatemala approved Decree 22-2026 to ease the impact of rising fuel prices on consumers’ wallets. The measure provides temporary exemptions from VAT and the tax on the distribution of petroleum and its derivatives until December 31, 2026. The decree requires the tax savings to be passed on in full to the final price and itemised per gallon on the electronic invoice.

In this interview, Mildred María Almengor Roca, head of Alegalis’s Corporate Law Department, explains which fuels are covered, how importers, distributors and service stations must document the exemption, and what happens to fuel purchased under the benefit that remains in inventory when the taxes are reinstated in January 2027.

LATIN COUNSEL: Which taxes does Guatemala exempt, and for how long?

Mildred Almengor: Decree 22-2026, approved under an urgent national procedure on September 22, establishes two temporary exemptions. The exemption from the tax on the distribution of petroleum and its derivatives (IDP) applies to the distribution in Guatemala of premium gasoline, regular gasoline, diesel and gas oil. The VAT exemption covers the import and sale of those same products and fuel alcohol. The decree also temporarily suspends VAT withholding on credit and debit card payments for fuel purchases. The measure is in force from October 1 through December 31, 2026, inclusive.

LATIN COUNSEL: How must the exemption be reflected in the price paid by consumers?

Mildred Almengor: The benefit must be passed on in full to the final price. The electronic invoice must identify the exemptions applied and the amount of the benefit per gallon dispensed. Fuel retailers must also report their prices daily to the Ministry of Energy and Mines, making it possible to compare reported prices with those actually charged.

LATIN COUNSEL: What must importers and distributors monitor while the measure is in force?

Mildred Almengor: Monitoring begins with an initial physical inventory and continues with monthly reports recording stock, incoming volumes and outgoing volumes. This documentation makes it possible to track fuel from import to sale and establish which volumes were purchased under the exemption. For sectors such as freight transport, distribution and trade, the measure’s most direct effect is a reduction in fuel costs.

LATIN COUNSEL: What happens to fuel purchased under the exemption that remains in inventory on December 31?

Mildred Almengor: The ordinary VAT and IDP regime is reinstated on January 1, 2027. Inventory acquired under the decree continues to be sold without those taxes being added until it is depleted. Companies must continue to report these balances monthly, so the monitoring by the Superintendencia de Administración Tributaria (SAT) may continue in 2027.

LATIN COUNSEL: Where are the main tax risks?

Mildred Almengor: They lie in applying the exemption to products or transactions outside its scope, using VAT tax credits without meeting the requirements, or passing on only part of the benefit to consumers. At the turn of the year, the risk is confusing inventory that retains the exempt treatment with transactions to which the ordinary regime applies again.

LATIN COUNSEL: What does Alegalis recommend companies do before the end of the year?

Mildred Almengor: Separate, in monthly closing reports, fuel purchased under the exemption from fuel taxed under the ordinary regime. It is also advisable to review supply contracts and pricing policies to ensure that the benefit passed on can be verified and that the treatment of taxes when the regime changes is clear.

Key facts

• Guatemala published Decree 22-2026 on September 30, 2026. The exemptions are in force from October 1 through December 31.
• The benefit must be passed on in full to the final price and itemised per gallon on the electronic invoice.
• The ordinary regime is reinstated on January 1, 2027. Inventory acquired under the exemption retains that treatment until it is depleted.