Guatemala Advances Bill to Exempt USDA Imports from VAT and Customs Duties

By Mayora IP

Guatemala’s Congress is advancing Bill Initiative 6711, a proposal that would exempt from Value Added Tax (VAT) and customs duties certain goods, supplies, donations and inputs imported by the United States Department of Agriculture (USDA). The initiative was introduced on February 11, 2026, and was presented to the plenary of Congress on February 17, 2026.

The proposal was referred to the Commission on Economy and Foreign Trade, which issued a favorable opinion on April 22, 2026. The favorable opinion represents an important step in the legislative process, although Initiative 6711 is not yet law and must complete the remaining legislative stages before it can enter into force.

A targeted tax and customs exemption

The proposed exemption has a specific scope. It does not establish a general exemption for U.S. imports or a broad reduction in tariffs applicable to private importers in Guatemala. Instead, it is directed at imports made by the USDA, covering goods, supplies, donations and inputs falling within the scope established by the proposed legislation.

The initiative is connected to U.S.-Guatemalan cooperation programs, particularly the Food Donation Agreement involving the U.S. Department of Agriculture. According to Guatemala’s Congress, the legislative proposal emerged after the tax-related benefit associated with the agreement expired in 2025.

The proposed legislation would therefore provide a domestic legal framework for continuing to facilitate imports associated with these programs without the VAT and customs duties that could otherwise apply.

Food assistance and agricultural development

The initiative is not limited to a tax policy objective. Congressional discussions have linked it to broader programs involving food security, nutrition, education and agricultural development.

The stated objectives include supporting efforts to combat chronic child malnutrition, improving nutrition, strengthening food-related educational programs and supporting agricultural productivity. The measure has also been presented as a mechanism to promote agricultural development, research, technology transfer and trade-related opportunities.

The Superintendency of Tax Administration (SAT) was also involved in the legislative review. According to congressional information, SAT Superintendent Werner Ovalle informed lawmakers that, following the administration’s analysis, there was no objection to the initiative proceeding through the legislative process.

The relevance of the expired agreement

The background to Initiative 6711 is important to understanding its limited scope. Guatemala’s Congress has stated that the relevant food donation agreement expired in 2025, creating the need for a new domestic legal framework for the tax and customs treatment of imports associated with the program.

The proposal should therefore not be characterized as a new free-trade arrangement or as a general preferential trade regime between Guatemala and the United States.

Rather, it is a targeted fiscal and customs measure designed to facilitate specific imports by the USDA in connection with assistance and agricultural programs.

This distinction is relevant from an international trade perspective. A free trade agreement establishes broader commitments concerning market access, tariffs and other trade rules between countries. An exemption such as the one proposed by Initiative 6711 operates on a much narrower basis, addressing the tax and customs treatment of specified transactions.