The Guatemalan government has announced the Law of Incentives for Electric Mobility, which was enacted through Decree 40-2022. The Law was published in the Official Gazette on 29 August 2022 and entered into force on 30 August, providing incentives for electric and other green energy vehicles, including hybrid and hydrogen-powered vehicles.
Certain VAT benefits are provided, including an exemption from VAT for up to 2 years on the import of equipment necessary for the manufacture and sale of green vehicles. Public transport services that use green vehicles are also exempted from corporate tax and VAT for the first 10 years of operation.
An exemption from VAT on the import and sale of green vehicles and the specific tax on vehicle registration is also provided over 10 years from the date of the law’s entry into force. This includes a 100% exemption for 5 years, followed by an exemption of 80% in the 6th year, 60% in the 7th year, 40% in the 8th year, 20% in the 9th year, and 10% in the 10th year. However, for hybrid vehicles, the exemption is limited to the specific tax on vehicle registration.