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The Electric Mobility Incentives Law

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Newsletter #139/September 2022

The Electric Mobility Incentives Law (the Law) entered into force on August 27. The purpose of said Law is the facilitation and promotion of the importation, sale, purchase and use of electric vehicles, hybrid vehicles, hydrogen vehicles and generally the electric transportation, to contribute with the energy diversification and greenhouse gas emissions.

The Law includes the following incentives:

  • Tax Incentives:

Tax

Exemption

Value Added Tax (VAT)

  • The sale and purchase of hybrid vehicles, electric vehicles, electric motorcycles, or vehicles fueled by hydrogen for any use, imported, assembled, or produced in Guatemala, as well as their first transfer of ownership.
  • The sale and purchase of cable cars, funiculars, electric trains, light trains, street cars, or trolleys, for any use, imported, assembled, or produced in Guatemala, as well as their first transfer of ownership.
  • The taxable event due to the provision of public transportation service and collective transportation through electric vehicles, hybrid vehicles, vehicles fueled by hydrogen and electric transportation systems. The exemption will be in force for 10 years, starting on the initial date of operations, and it will be applicable starting on the entry into force of the Law.
  • The sale and importation of specific components for electric vehicles, electric motorcycles, electric transportation systems or vehicles fueled by hydrogen, as well as their first transfer of ownership, for a 10-year period, starting on the entry into force of the Law.
  • The sale and purchase and importation of chargers for electric vehicles or motorcycles, as well as their first transfer of ownership.

Specific Tax on the First Registration of Motor Road Vehicles (IPRIMA, due to its acronym in Spanish)

  • Compraventa de vehículo híbrido, eléctrico, motocicleta eléctrica o impulsado por hidrógeno para todo uso, importado, ensamblado o producido en Guatemala.
  • La compraventa de teleférico, funicular, tren eléctrico, tren ligero, tranvía o trolebús, para todo uso, importado, ensamblado o producido en Guatemala

Income Tax

  • The income generated by the activity of assembling and/or producing electric vehicles, hybrid vehicles, electric motorcycles, vehicles fueled by hydrogen and electric transportation systems for a 10-year period, and it will be applicable starting on the entry into force of the Law.
  • The taxable event due to the provision of public transportation service and collective transportation through electric vehicles, hybrid vehicles, vehicles fueled by hydrogen and electric transportation systems. The exemption will be in force for 10 years, starting on the initial date of operations, and it will be applicable starting on the entry into force of the Law.

Road, Sea, and Aerial Tax

  • Only for electric vehicles, hybrid vehicles, heavy or special hybrid vehicles, electric motorcycles, vehicles fueled by hydrogen, funiculars, cable cars, electric trains, light trains, street cars, or trolleys for public and collective transportation services:
  • 100% for 2022 and 2023
  • 80% for 2021
  • 60% for 2020
  • 40% for 2019
  • 20% for 2018

 

  • Incentives for the public administration: State and Municipal entities may acquire hybrid vehicles, electric motorcycles, and hydrogen vehicles, when convenient for the State’s interests.

 

The exemption period for all tax incentives is 10 years, starting on the entry into force of the Law, which was on August 30, 2022. Therefore, the mentioned tax incentives will end on August 29, 2032.

 

The Law also recognizes the freedom to install, operate and provide charging services for electric vehicles in the national territory. A distributor or trader may be providers of charging services for electric vehicles, if they comply with the Law, the General Electricity Law, its Regulations and the applicable Technical and Commercial Provisions.

 

For more information, please contact:

María de Lourdes Villanueva, maria.villanueva@carrillolaw.com  

Gabriel Cabrera Menocal, gabriel.cabrera@carrillolaw.com

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