Author: dev_

Executive Summary

Standard	Date	Content
Decree No. 2530/2024	September 17, 2024	The Executive Branch included aluminum alloy profiles in the National List of Exceptions (“NLE”) to the Common External Tariff (“CET”) and increased the National Import Tariff (“NIT”) for their importation.
General Resolution No. 19/2024	September 13, 2024	The National Directorate of Tax Revenues (“DNIT”) established the beginning of the voluntary adhesion phase for small taxpayers as electronic billers.
Binding Consultation	July 2024	The DNIT analyzed the Non-Resident Income Tax (“INR”) levy on the consulting services of a Chilean company under the Double Taxation Treaty (“DTT”) between Paraguay and Chile.
Binding Consultation	July 2024	The DNIT expressed its opinion on the crediting of income tax (“ITx”) withholdings from abroad against Corporate Income Tax (“IRE”).

More information

► Decree No. 2530/2024 - NIT for aluminum alloy profiles was increased.

By means of Decree No. 2530/2024 (“Decree”), the Executive Branch amended the Annex to Decree No. 6897/2022 and its amendments, which incorporated into the national legal system the latest version of the Southern Common Market’s (“Mercosur”, by its Spanish acronym) CET and consolidated the NLE containing the tariff levels to be applied to imports originating from Countries that are not part of, or do not have a tariff agreement with Mercosur.

The NLE contains the NIT’s tariff items that differ from the CET, but only for each Country. Normally, the inclusion of a tariff item of the Mercosur’s Common Nomenclature (“MCN”) in the NLE implies that the NIT will be lower than the CET, thus seeking to encourage the importation of such goods. However, the opposite may also occur: the inclusion of a tariff item in the NLE implies an increase in the NIT with respect to the CET, thus making the importation of the affected goods more expensive as a measure to support their domestic production.

In this case, the Decree did just the latter, since it included aluminum alloy profiles in the NLE to make their importation more expensive, raising the NIT rates applied to them from 10.8% to 14%. For this purpose, it first excluded from the LNE two other items that already had the CET at 0%, as follows:

The increase of the NIT on imports of aluminum alloy profiles is expected to take effect on two different dates:

1. In general, by the day following the publication of the Decree in the Official Gazette, which has not occurred yet, at least not until Official Gazette No. 204 dated October 14, 2024 (nor is the increase verified in the import tax calculator of the DNIT, available here).
2. Exceptionally, after 60 days from the publication of the Decree in the Official Gazette, for import dispatches corresponding to goods in the following situations:
   1. destined for national customs territory and loaded on the transports;
   2. in a Paraguayan primary customs zone; or
   3. acquired before the general effectiveness of the Decree by contract, invoice or legal receipt that proves it.

This measure of support for local aluminum production seeks to grant equitable market conditions to this domestic industrial sector that has been catalogued in the Decree as vulnerable to practices that distort international trade. It complements another measure of support to the domestic metallurgical industry in public procurements, established by Decree No. 2522/2024 (which has also not been published in the Official Gazette until the most recent issue, mentioned above).

► General Resolution No. 19/2024 - The voluntary adhesion phase begins for taxpayers who wish to become electronic billers through the Ekuatia'i system.

By means of General Resolution No. 19/2024 (the “RG-19”), the DNIT established the beginning of the voluntary adhesion phase to the Ekuatia'i system as from October 1, 2024, for those taxpayers who wish to issue their invoices electronically. Those who have the following characteristics, in addition to complying with the general requirements to access the Ekuatia'i system, will be able to access this phase:

1. Be a natural person.
2. Be in the DNIT’s category of small taxpayers.

The general requirements to access the Ekuatia'i system are: (3) to have a single commercial establishment and (4) a single point of dispatch declared in the Single Taxpayer Registry; since this is free software that the DNIT has made available to those taxpayers who do not have a high turnover.

Taxpayers who comply with the above can join the Ekuatia'i system, regardless of the tax they pay and the invoicing method they currently use. To do so, they must follow the procedures below:

1. Obtain the Qualified Electronic Signature Certificate (“QESC”), which is a free procedure that is done in person before the DNIT, whose requirements are established in General Resolution No. 757/2024, which we talked about in another publication, which you can access by clicking here.
2. Request, on a one-time basis, the authorization as electronic biller, as provided for in General Resolution No. 6/2024 (“RG-6”), whose approval generates the electronic stamping number (which is unique and perpetual) and the Taxpayer's Security Code, all of which we have discussed in another publication, which you can access by clicking here.
3. To cancel the stamping of the other means of generating invoices and other tax receipts, except for the virtual withholding voucher.

The procedures of paragraphs (b) and (c) must be carried out within 60 days after obtaining the QESC. The authorization as an electronic biller can be obtained independently of the procedure in paragraph (c). After said term, the adherent to the Ekuatia'i system is obliged to issue all its vouchers electronically (except for the virtual withholding voucher), so that non-compliance with this last procedure within the term indicated will cause the DNIT to carry it out ex officio and sanction the taxpayer with a fine of Gs.50,000 (~USD 6.30) for minor offences.
 
Finally, RG-19 established an extension until October 31 of this year for the application of penalties to taxpayers selected to obligatory adhere to the Ekuatia'i system who have been issuing invoices and other vouchers by means other than this one, beyond the term outlined in Article 27 of RG-6. After that date, a fine of Gs.50,000 will be applied for each voucher or document that is not issued through the Ekuatia'i system, which will be accumulated up to the maximum fine for minor offences (currently Gs.1,530,000, or ~USD 200) for each monthly period.
 
The complete list of taxpayers mandatorily designated as electronic billers through the Ekuatia'i system can be found in the annex to General Resolution No. 06/2024. Which can be consulted here.

► Response to Binding Consultation – INR to the consulting services rendered by a Chilean company in the context of the DTT between Paraguay and Chile.

In response to a binding consultation in July of this year, the DNIT analyzed the INR levy on consulting services that a legal entity from Chile would provide to Itaipu Binational on the pre-feasibility and feasibility of a railway project to be used in the country, which would have a total duration of 195 days, of which only 24 days would be with physical presence on the site located in Paraguay, while the rest of the days the services would be provided remotely from Chile.

In this regard, the DNIT clarified that it is important to demonstrate that the provider of consulting services is a tax resident of Chile, for which it must obtain and present to its local client the certificate of tax residence issued by the competent authority of that country (Internal Revenue Service, or SII by its Spanish acronym) with all the data required by Article 7 of General Resolution No. 65/2020 of the former Undersecretariat of State for Taxation.

Having clarified this, the DNIT proceeded to classify the consulting services as “Business Profits” under Article 7 of the DTT between Paraguay and Chile, which are only subject to taxation in the country of residence of their supplier (in this case, Chile), unless they are rendered through a permanent establishment in the other country of the DTT (in this case, Paraguay). A permanent establishment would only be formed, under Article 5 of the DTT, if there is a fixed place of business in the country of supply of the services, or company's employees provided their services in the country for more than 183 days in any 12-month period.

Consequently, the DNIT concluded that in the case of the applicant, the consulting services are classified as “Business Profits” under the DTT and they are not provided through a permanent establishment, so INR withholding does not apply, since they should only be taxed the ITx in Chile. However, if the services were to be rendered through a permanent establishment in Paraguay, INR withholding would not be applicable either, since that establishment should be registered as an IRE taxpayer and settle such tax.

► Answer to Binding Consultation - Credit of ITx withholdings from abroad against IRE.

In response to a binding consultation during July of this year, the DNIT clarified several issues regarding the crediting of ITx withholdings from abroad against IRE. This institution specifically referred to (1) the methods to relieve international double taxation of ITx that are recognized by domestic legislation, (2) the income benefited by such methods, (3) the limits of such reliefs and (4) the procedure to execute them.

Regarding the methods for international double taxation relief, the DNIT clarified that they are necessary only when the tax sovereignty of 2 States concur: the State of source or place of generation of income (“SS”), and the State of residence of the taxpayer (“SR”). In this case, although Paraguay may exercise its tax sovereignty over income obtained outside the country, it prioritizes the tax sovereignty of the SR over them, applying one of the following 2 methods to eliminate double taxation: exemption or tax credit.

Although the DNIT only refers to the tax credit method, the fact is that Law No. 6380/2019 (“Tax Law”) also recognizes the exemption method when the taxpayer pays on the affected income an ITx at a rate equal to or higher than the IRE’s 10%; applying the tax credit method, in principle, only when the ITx rate from abroad is lower than IRE’s. Both methods would be limited to income from abroad activities that are not included in any of the items of Article 6 of the Tax Law, thus excluding, in principle, ITx payments to other States for services and investments made from Paraguay.

Specifically concerning the tax credit method, the DNIT implicitly refers to the species of (a) ordinary credit and (b) full credit, whose point of contact lies in the fact that both compare the ITx paid in the SS (“SS-ITx”) against the ITx that would be payable in the SR (“SR-ITx”), to credit the first against the latter. However, both differ in which amount prevails: the SR-ITx prevails in the ordinary credit method, while SR-ITx prevails in the full credit method. This gives rise to the following scenarios:

The DNIT emphasizes that the ordinary credit method is the one provided for in the Tax Law, and is the one that applies when there is no DTT; or when the DTT allows it, but if the DTT provides for the full credit method, then this is the one that will prevail, in accordance with the order of precedence of legal rules, as provided for in Article 137 of the Paraguayan National Constitution. This prevalence of the DTTs over the Tax Law also applies to the types of income provided for in the DTTs, to which the methods to relieve double taxation provided therein are applied, which may include the incomes foreseen in any of the numerals of Article 6 of the Tax Law, among others.

Finally, regarding the procedure to recognize the ITx paid abroad as a tax credit in the IRE’s settlement, the DNIT pointed out that this does not occur freely and automatically in the settlement affidavit of said tax, but that, in all cases, the taxpayer must:

1. Submit a note addressed to the National Director of the DNIT and file it through the entry desk, requesting the recognition of the ITx paid abroad and the enablement of box 109 “Income Tax paid abroad credited against IRE for double taxation relief” of Form No. 500 of the obligation 700-IRE General.
2. Attach to the note the document that supports the payment of the ITx abroad, which would normally be the withholding voucher from abroad, plus the sale invoice issued and stamped by the DNIT that supports the services or activity abroad. However, the General Management of Internal Taxes may require other documents it deems pertinent.

Executive Summary

Standard	Date	Content
General Resolution No. 17/2024	August 29, 2024	The National Directorate of Tax Revenues ("DNIT") extended the application of fines for late filing of the electronic voucher registry established by General Resolution No. 90/2021.
General Resolution No. 105	December 17, 2021 (Reminder)	Validity of the due date calendar for mandatory adherence to the Integrated National Electronic Invoicing System ("SIFEN") - Reminder for Group 10, as well as for new taxpayers.
Binding Consultation	August 2024	The DNIT ruled on the refund of Value Added Tax ("VAT") for the export of chia grains.
Binding Consultation	February 2024	Personal Income Tax ("IRP") levied on the remuneration of a civil servant commissioned to a consulate general of Paraguay abroad.
Non-Binding Consultation	June 2024	The DNIT issued its opinion regarding the conditional distribution of profits by the ordinary shareholders' meeting.

More information

► General Resolution No. 17/2024 - The application of fines for late filing of the electronic register of vouchers is extended.

By means of General Resolution No. 17/2024 (the "RG-17"), the DNIT extended until October 31 of this year the application of penalties for late filing of the electronic registry of vouchers, both for taxpayers with obligation 955-Monthly Voucher Regime ("Obligation 955") and for those with obligation 956-Annual Voucher Regime ("Obligation 956").

This is a partial extension of the grace period that had been granted since 2023 with General Resolutions No. 124/2023, 126/2023 and 132/2023 of the former Undersecretariat of State for Taxation, as well as with DNIT’s Resolutions No. 403/2023 and 730/2023, and DNIT’s General Resolution No. 07/2024.

The grace period with all benefits expired on August 31 of this year, so after that date and until October 31 the late confirmation of voucher information in Obligation 955 and Obligation 956 is a tax non-compliance without fines for contravention, which would entail, however, the following negative consequences: impossibility to generate the tax compliance certificate, an increase of the taxpayer's risk index, among others.

For non-compliances as of November 1, in addition to the consequences mentioned in the preceding paragraph, the fines for contraventions will also apply.

The partial extension applies until the fiscal year 2023 of Obligation 956, and until the period of August 2024 of Obligation 955, since the filing of the electronic register of vouchers can be made until the subsequent month —second month after— the fiscal period to be declared, since the maximum term for the filing of the electronic register of vouchers of said period is until October, filing that must be made according to the perpetual due date calendar.

► General Resolution No. 105/2021 - The calendar for taxpayers to compulsorily adhere to the SIFEN (REMINDER) was established.

All taxpayers, and especially those in group 10 of the SIFEN, are reminded that the former Undersecretariat of State for Taxation (now DNIT) issued General Resolution No. 105/2021 (the "RG"), on December 17, 2021. By means of this RG, the mandatory calendar for several groups of taxpayers to adhere to the SIFEN was established, foreseeing 10 groups with 9 different due dates, with a difference of one quarter between each one, from group 3 onwards, according to the following calendar:

Obligated taxpayers from groups 3 to 10 may start issuing electronically before the established date, in case they wish to do so gradually. Once the mandatory date arrives ―October 1, 2024, for group 10― they must exclusively issue all their documents electronically, since the authorization and stamping of their pre-printed or self-printed documents will cease to be valid, except for the one related to virtual withholding vouchers.
 
Legal entities registered as taxpayers in the Single Taxpayers Registry as of January 1, 2025, will only issue their tax documents electronically, through the E-Kuatia or E-Kuatia'i Systems, except the virtual withholding voucher. To this effect, the DNIT will not issue stamps for means of generation different from the electronic one, except for the exception indicated.
 
In statements to the press, the National Director of the DNIT, Oscar Orué, declared that it is in the plans of the institution that by 2026 the use of electronic invoices will be mandatory for the 800,000 active taxpayers; or at least for those based in Asunción, the Central Department and in the departmental capitals.
 
It should be considered that the implementation of an electronic invoicing system is a process whose cost and development are borne by the taxpayer, which often entails a considerable implementation time, as recognized by the DNIT in Article 4 of the RG when it grants a period of up to 18 months of adaptation to those who wish to become electronic billers voluntarily.
 
Therefore, it is essential to be aware of whether you or your company are affected by the SIFEN obligation, because if you are and you do not take the appropriate measures in time, you may no longer be able to operate normally. If you want to know if you or your organization are affected by this RG, you can consult the complete list of taxpayers here.

► Response to Binding Consultation - VAT refund for export of chia grains.

In a response issued to a binding consultation during August of this year, the DNIT established its position on the classification of chia grains for VAT refund on purchases for export: (i) it is not eligible for refund because it is an agricultural product in its natural state or its derivatives from the first processing or industrialization process; or (ii) it is eligible for refund because it is a type of good not included in said category.

In this regard, the DNIT concluded that the VAT refund of the purchases affected to the export of chia grains corresponds, because this product is not expressly included in the list of agricultural products to which the 5% VAT rate applies, contained in Article 90, paragraph d), numeral 1 of Law No. 6380/2019 ("Tax Law"), as indicated in Article 15 of the Annex to Decree No. 3108/2019.

Thus, the DNIT expressed its restrictive interpretation of the list of goods that are not subject to VAT refund for export purposes, in the sense that, if the goods are not listed in the Tax Law as agricultural goods for VAT purposes, then the VAT refund of the purchases for export purposes is applicable.

► Answer to Binding Consultation - IRP taxation on the income of a civil servant commissioned to a Paraguayan consulate abroad.

In response to a binding consultation in February of this year, the DNIT expressed its opinion on the taxation of IRP on the remuneration received by a public official who is not a military nor a Ministry of Foreign Affairs official, but who has been commissioned to serve in one of the three consulates general of Paraguay in the United States of America (New York, Los Angeles and/or Miami).

In this regard, the DNIT stated that, although the general rule for the source of income in the IRP is that the remunerated activity should be carried out in Paraguayan territory, this recognizes as one of its exceptions the remuneration paid or credited by the State to officials who qualify as IRP taxpayers.

Regarding those who qualify as IRP taxpayers, the DNIT also added that, although the general rule for this is that they are individuals with tax residence in Paraguay, this criterion is replaced by Paraguayan nationality for those who render services in diplomatic missions, consular offices or delegations and representations of Paraguay abroad, being able to escape from this only those who have tax residence in the country where they render their services, provided such services are not linked to the diplomatic missions or consular offices of the country.

In this case, since it is a public official of Paraguayan nationality commissioned to render her services in one of the consulates general of Paraguay in the United States of America, the DNIT concluded that the remuneration she receives for such services is taxed by the IRP, even though she has tax residence in that country, due to her connection with the consular office of Paraguay. However, the particularity of the case lies in the way of settling the IRP in this situation.

It would be normal for the applicant to be subject to the presumptive settlement regime of 1% of gross income, set forth in Articles 63 and 64 of the IRP regulations annexed to Decree No. 3184/2019, which results from applying the maximum rate of 10% on a presumptive taxable base of 10% of gross income. However, this is only possible to do so in pure form through the withholding that must be practiced by the General Directorates of Administration and Finance of the Ministry of Foreign Affairs or of the Command of the Military Forces on the payments they make.

The problem in this case is that the applicant was commissioned by an institution other than the military or the Ministry of Foreign Affairs, and therefore it is not possible to make the IRP withholding. Given this situation, the DNIT arrived at the pragmatic solution of having the applicant make her own presumptive self-assessment of the IRP, following the following criteria:

1. Use Form No. 515 "Personal Income Tax - Income derived from the rendering of Personal Services".
2. Declare the total amount of gross income for the year corresponding to the services rendered in the consular office, excluding contributions to the retirement and pension system or to a social security system created or admitted by law.
3. To use 10% of the gross taxable income as the taxable base of the IRP, enter this amount in the column "Taxed -II-", box 12 of item a), Heading 1, and the remainder in the column "Exempt -I-", box 10 of item a), Heading 1.
4. Not to deduct any expense, since it is a presumptive settlement.
5. Apply the progressive rates of 8%, 9% and 10% on the amount of the presumed taxable income, according to the corresponding brackets.

► Response to Non-Binding Consultation - Legal criteria regarding conditional profit sharing.

In a response issued to a non-binding consultation during the month of June of this year, the DNIT set out its position regarding the distribution of profits and the taxability of the Dividend and Profits Tax (“IDU”) in a particular situation.

In this regard, the taxpayer, which is a corporation, stated that the ordinary shareholders' meeting had decided to capitalize unconditionally 80% of the profits of X fiscal year; while the other 20% is also destined for capitalization, but conditioned to the shareholders not exercising on this portion the power granted to them by the meeting to withdraw them as a cash dividend in proportion to their capital stake, being able to exercise this right within 3 business days.

In this regard, the DNIT stated that 80% of the profits are not subject to the IDU, since they are unconditionally destined to capitalization. Now, concerning the remaining 20%, the DNIT stated that it within the shareholders meeting attributions to decide unequivocally the distribution or not of the profits, without leaving such resolution to the discretion or decision of each shareholder; the latter (attribution to shareholders to withdraw dividends) being equivalent to the provision of profits to those shareholders.

Therefore, the DNIT concluded that, even when the shareholders meeting grants the shareholder the decision to collect or capitalize the profits, this decision will give rise to the IDU's obligation, since it grants the shareholders the individual right to the dividend, the form of execution of which is left to their discretion: collection or capitalization of the dividend, depending on the individual decision of each shareholder.

Executive Summary

The Executive Branch issued Decrees No. 2063/2024 and 2167/2024 (both, collectively, the "PTR Decree"), whereby it established the Purchasing Tourism Regime ("PTR" or “Regime”) for the settlement of the Value Added Tax ("VAT") on the importation and commercialization of certain goods intended for tourists ("PTR Goods"), and abrogated the previous tourism regime set forth in Decree No. 1931/2019, which it updates and replaces.

More information:

The PTR applies to the importation and commercialization of PTR Goods that are classified under one of the 485 tariff codes identified in the Annex to the PTR Decree, prepared based on the Mercosur Common Nomenclature ("MCN") and which have the following structure:

• Subjects of the PTR

The PTR Decree distinguishes between the following parties involved in the Regime:

1. Tourists: Final recipients of the PTR Goods who meet the following requirements: (i) natural person, (ii) foreigner (not having Paraguayan nationality), (iii) not having domicile in the country (iv) nor residence in Paraguay.

2. PTR Taxpayers: Individual Limited Liability Companies, Simplified Joint Stock Companies, any type of commercial company created or admitted by law, and branches, agencies or permanent establishments of persons domiciled, or entities incorporated abroad, engaged in the commercialization of PTR Goods. According to their intervention in the Regime, they are subdivided into the following categories, without prejudice of meeting both qualities:
   • PTR Importers: Those who import and sell PTR Goods to other PTR Taxpayers.
   • PTR Traders: Those who sell PTR Goods to Tourists or to third parties who are neither Tourists nor PTR Taxpayers ("Third Parties").

3. Foreign Trade Intermediary Companies: Trading companies and other companies engaged in the industry that are (i) taxpayers of the Corporate Income Tax ("IRE") registered with the DNIT, (ii) trade in goods and products supplied mostly by third parties, and (iii) use international networks or infrastructure to supply themselves or their customers ("EICE").

PTR Taxpayers may only sell PTR Goods to Tourists in the following border cities of Paraguay: Asunción, Ciudad del Este, Encarnación, Pedro Juan Caballero, Pilar and Salto del Guairá; for which purpose they must have premises located there. This shall not limit the operations of the PTR Importers, who may operate as such in any city of the country.

• VAT regime

Under the Regime, if the PTR Goods are not sold to Third Parties, the VAT is settled and paid only at the time of their importation at the expense of the PTR Importer, after their introduction into the country by such party, a third party, or an EICE that sold them to the PTR Importer before the formalization of the customs clearance. To remove the PTR Goods from the customs area, the PTR Importer must have complied with the following tax obligations:

The VAT and the prepayment of the IRE must be paid before the General Customs Management ("GGA") of the DNIT, while the IRE withholding must be made by the PTR Importer to the EICE on the price that the latter fills in the VAT exempt box in the invoice issued to the PTR Importer. The taxation of the acquisition of the EICE will not be applicable if the EICE and the PTR Importer are related parties under transfer pricing rules, being applicable, instead, the normal taxation of transfer in customs area (VAT exempt) and of direct purchase by the PTR Importer.

The PTR Taxpayer who sells the PTR Goods to Tourists or other PTR Taxpayers will do so exempt from VAT and will support these operations with the invoices in which the identification of the purchaser must be stated (they cannot be unnamed) and, in the case of Tourists, their country of residence. In these cases, the VAT paid by the PTR Importer to the GGA will constitute a single and definitive payment, as well as a deductible expense of the IRE, since it is related to a VAT-exempt sale. Sales to Tourists will not give the right to VAT refunds.

If the PTR Taxpayer sells the PTR Goods to Third Parties or documents the operation with an unnamed invoice, the PTR Taxpayer must invoice the corresponding VAT under the general settlement system of this tax. In these cases, if the PTR Importer is the one who has made the sale, the VAT paid by him to the GGA will constitute a VAT credit, in accordance with the settlement rules of this tax.

If the DNIT detects that a PTR Taxpayer invoiced the sale of PTR Goods to Third Parties as VAT exempt or in an unnamed form, it will revalue the amount of the tax according to the general regime and apply penalties.

• Other incentives

In addition to the reduced VAT, the PTR Decree also establishes other incentives for the Regime in terms of costs for copyrights and related rights, as well as for the importation of hazardous cargo by air transport.

With respect to copyright and related rights costs, the amount of the Compensatory Remuneration Right for Private Copying is halved. This is the economic compensation granted to authors, composers, artists, performers and producers of phonograms or videograms, for the unauthorized copying of their works. Thus, in the PTR, this compensation goes from 0.5% to 0.25%, since it is calculated only on 50% of the value of the entry into the national territory of the products and devices subject to its payment.

With regards to the importation of hazardous cargo by air, a reduction of one point seven percentage points (1.7 pp) in the handling service fees of the National Directorate of Civil Aeronautics ("DINAC") is foreseen, according to the following:

For the DINAC’s rates reduction, the PTR Importer must present the Certificate of Insurance of the respective cargo, which must contain the following information: (i) date of issue, (ii) certificate number, (iii) QR code for verification of validity, (iv) name of the consignee, (v) Policy number, (vi) Air Waybill number, (vii) weight in kilograms, (viii) origin and destination, (ix) coverage and (x) total amount insured. Upon presentation of such insurance certificate, it shall become part of the importer's declaration in detail.

Customs authorization for the transit of hazardous cargo will be granted once the PTR Importer has the Certificate of Insurance, the invoices of origin and the verification report of such certificate issued by the Customs Administration. Once the transit is authorized, DINAC will charge a 2% fee on the total FOB value of the cargo, according to the documentation presented. In all other cases, the rules outline in the regulations in force shall apply.

• Registration in the PTR

To benefit from the PTR, both the EICE and the PTR Taxpayers must enroll in the registry set up by the DNIT, specifically with the General Internal Revenue Service, without prejudice to the importers, in such capacity, to do so concomitantly with the GGA.

The documentary requirements established to obtain authorization in the PTR must be maintained during the entire term of its validity. In the case of the registration of the EICE, they will be established by resolution of the DNIT, while those for the registration of the PTR Taxpayers are as follows:

If the PTR Taxpayer or whoever wishes to register as such is the holder of more than one domestic or foreign bank account, he/she must identify each one of them in the registry, attach the respective bank statements and indicate those accounts through which the payment transactions shall be made. Any variation or modification to the information of the registry must be communicated to the DNIT within 10 working days.

The qualification as a PTR Taxpayer will have a duration of two (2) calendar years, provided that the DNIT does not revoke it. Renewal will be made at the request of the interested party, for the same term, provided that the requirements for registration are met and the PTR Taxpayer has demonstrated cooperative behavior with the authorities e.

The DNIT will revoke the PTR Taxpayer's qualification when it: (i) fails to comply with any of the requirements established for its qualification or other obligations; (ii) commits smuggling or fraud according to Law No. 2422/2004, "Customs Code"; or (iii) sells the PTR Goods in with unnamed invoice. This revocation will cause the disqualification to operate in the PTR for 2 years from its notification.

• Obligations and limitations

The PTR Taxpayers will be obliged to have an External Tax Audit as from the fiscal year in which they have registered to the Regime, regardless of the amount of their annual turnover. They must also individualize in their inventory the PTR Goods and cooperate with the controls and inspections carried out by the DNIT.

In addition, the PTR Taxpayer cannot incorporate the PTR Goods as capital goods. In case of violating this prohibition, in addition to the penalties that the DNIT may apply, the DNIT will revalue and determine the VAT according to the general regime.

The PTR Goods identified in the following chapters of the MCN can only be sold to Tourists directly by PTR Importers, not by PTR Traders, which means that they may only be sold once under the PTR Regime, and not several times, as would be the case if they could be sold between PTR Taxpayers:

In these cases, PTR Importers must comply with the following special obligations: (i) submit an inventory of the initial stock of goods included in those chapters of the MCN at the time of requesting their qualification before the DNIT; and (ii) submit a detail of the sales made every quarter. Failure to comply with the latter will lead to suspension in the PTR until regularization.

• Validity of the PTR

 El Decreto RTC fue publicado en la Gaceta Oficial N° 134 del 9 de julio de 2024, por lo que entró a regir desde el día siguiente, a pesar de la corrección publicada en la Gaceta Oficial N° 146 del 24 de julio de 2024. Las habilitaciones otorgadas para operar bajo el anterior régimen de turismo del Decreto N° 1931/2019, por lo tanto, estuvieron vigentes hasta el mes de agosto de 2024. No obstante, los bienes ingresados al inventario de los Contribuyentes RTC bajo el anterior régimen de turismo deberán ser enajenados conforme con las reglas vigentes al momento de su adquisición.
 
Finally, if you wish to consult the list of goods included in the PTR established in the annex to the PTR Decree, you may do so by entering here.

La implementación de un Reglamento Interno de Trabajo (RIT) es fundamental para las empresas en Paraguay, no solo porque es un requisito legal en ciertos casos—dependiendo del número de trabajadores y la actividad económica—sino también porque actúa como una herramienta clave para regular las relaciones laborales. Es importante señalar que, en caso de no contar con un RIT, el Ministerio del Trabajo, Empleo y Seguridad Social (“MTESS”) puede imponer multas que oscilan entre 10 y 30 jornales mínimos, lo que representa un impacto en la economía de la empresa. Un RIT bien diseñado facilita la aplicación de sanciones de manera justa al establecer claramente los deberes y derechos tanto del empleador como de los trabajadores. Además, protege los derechos laborales, permitiendo que estos sean exigidos si se vulneran los procedimientos establecidos.

Este reglamento está regulado en el Código de Trabajo (CT) paraguayo, específicamente en el Libro III, Título III, artículos 350 al 357. En particular, el artículo 356 del CT se encuentra reglamentado por la Resolución MTESS 1342/2020 que aprueba las medidas administrativas de requisitos y guía de elaboración del anteproyecto para solicitudes de homologación de un RIT. El CT define el RIT como un conjunto de disposiciones obligatorias, acordadas por igual número de representantes del empleador y de los trabajadores, destinadas a regular el orden, la disciplina y la seguridad. Estas normas son esenciales para asegurar la productividad de la empresa y el buen desempeño de las labores en los establecimientos de trabajo.

Finalidad y contenido esencial de un Reglamento Interno de Trabajo

El objetivo principal del RIT es asegurar una relación laboral armoniosa, estructurada y disciplinada entre trabajadores y empleadores, lo que favorece la productividad. Para lograr este fin, el reglamento debe incluir ciertos elementos clave, como:

• Nombre de la empresa: Identificación oficial de la empresa a la que aplica el reglamento.
• Contrato de trabajo: Descripción de la relación laboral, incluyendo derechos y obligaciones de ambas partes.
• Período de prueba: Duración y condiciones del período de prueba antes de la contratación definitiva.
• Organización interna: Estructura organizacional de la empresa y funciones de cada área.
• Jornadas y horarios de trabajo: Especificación de la duración de la jornada laboral y horarios de entrada y salida.
• Asistencia, inasistencia y puntualidad: Reglas sobre asistencia, manejo de ausencias y puntualidad.
• Remuneración: Detalle de la política de pagos, salarios y bonificaciones.
• Vacaciones: Regulación de los días de vacaciones conforme a la normativa vigente.
• Permisos y licencias: Tipos de permisos y procedimientos para solicitarlos.
• Permiso de maternidad/paternidad: Condiciones para el disfrute de permisos por nacimiento o adopción.
• Higiene y apariencia personal: Normas sobre higiene y presentación que deben cumplir los trabajadores.
• Elementos de trabajo y seguridad: Provisión de equipos y medidas de seguridad para prevenir accidentes.
• Derechos, prohibiciones y obligaciones: Definición clara de derechos y responsabilidades de ambas partes.
• Prevención de violencia laboral, mobbing y/o acoso en el lugar de trabajo: Políticas de prevención y procedimientos de denuncia, mecanismos de protección y posibles sanciones.
• Faltas y sanciones: Especificación de faltas laborales y sanciones aplicables, según la gravedad de cada falta.

Es importante señalar que el RIT no es una herramienta estática. Debe adaptarse a nuevas normativas que surjan en respuesta a cambios en el ámbito laboral, garantizando así la protección de los derechos de los trabajadores y el cumplimiento de las responsabilidades del empleador.

Un ejemplo relevante es el teletrabajo, regulado por el artículo 6° de la Ley 6.738 de 2021. Debido a que esta forma de empleo genera condiciones laborales diferentes a las tradicionales mediante el uso de tecnologías de la información y telecomunicaciones, es de suma utilidad que el Reglamento Interno de Trabajo detalle claramente las condiciones específicas, objetivos, mecanismos de control y evaluación, y los derechos y obligaciones de los teletrabajadores.

Beneficios de un Reglamento Interno de Trabajo

Contar con un RIT bien estructurado permite a la empresa gestionar eficientemente a sus colaboradores, lo que se traduce en un mejor desempeño organizacional. Facilita la implementación de normas adaptadas a las necesidades específicas de cada sector. Por ejemplo, en una empresa de servicios financieros, es crucial incluir normas sobre confidencialidad para proteger la información sensible de clientes y transacciones.

Además, se deben incorporar políticas sobre el manejo de datos y la protección de la información financiera, alineándose con las normativas de privacidad y seguridad digital, para mitigar riesgos y garantizar la integridad de los datos.

Un RIT bien diseñado no solo reduce riesgos al estar en cumplimiento con las normativas establecidas por el MTESS, sino que también fomenta un entorno laboral seguro, previniendo accidentes y minimizando posibles conflictos legales dentro de la empresa.

Si tiene dudas sobre qué es un Reglamento Interno de Trabajo, cómo implementarlo o ajustarlo a las particularidades de su negocio, no dude en contactarnos. Nuestro equipo de expertos está disponible para brindarle el asesoramiento adecuado y acompañarle en cada paso del proceso, garantizando que su empresa cumpla con todas las normativas legales y optimice su gestión.

Through Resolution No. 383 dated June 12, 2024 (the “Resolution”), the Secretariat for the Prevention of Money Laundering or Assets (“SEPRELAD“) authorizes the creation and implementation of the citizen inquiry module named "E-Porandu" on its institutional website.

• Objective: To facilitate citizen access to information and services through the "E-Porandu" module, promoting efficiency and transparency in administrative processes.
• Benefits:
  • Improved service to citizens through the use of Information and Communication Technologies (ICTs).
  • Optimization of public management and enhancement of administrative procedures.
  • Greater transparency and accessibility to information through an electronic ticketing system.
• Implementation: The module will be the sole channel for receiving citizen inquiries and suggestions starting August 1, 2024, replacing Resolution No. 316.

“SEPRELAD“ is committed to providing a more efficient and accessible service through this new module, available at www.seprelad.gov.py.

Through Resolution No. 312 dated June 24, 2024 (the “Resolution”), the Secretariat for the Prevention of Money Laundering or Assets (“SEPRELAD”) approved the submission of reports on national or international physical remittance operations of money or securities via the Integrated Operation Reporting System (“SIRO”) by obligated entities authorized by the Central Bank of Paraguay (“BCP”).

Annex A of the Resolution contains detailed instructions for reporting physical currency remittances abroad. To this end, the SIRO platform requires the following data, among others: (i) Shipment date; (ii) Carrier; (iii) Currency; (iv) Remitted amount; (v) Destination country; (vi) Destination bank; (vii) Beneficiary bank; (viii) Account number; (ix) Account holder. Once the declaration is registered, it will remain in "Pending" status by default, awaiting confirmation of the data entered by the cash-in-transit company.

The system will send an email notification to the cash-in-transit company, requesting validation of the declaration data. To do this, the company must log into SIRO and validate the corresponding declaration. Once the data is confirmed by the cash-in-transit company, the option to print the available declaration shipping receipt will be enabled.

Through Resolution No. 9, Act No. 41, dated September 5, 2024 (the "Resolution"), the Central Bank of Paraguay (“BCP”) approved modifications to the Regulation on Electronic Payment Methods. These changes aim to improve financial inclusion and optimize the regulation of non-bank electronic transfers and electronic money.

The Resolution introduces new provisions affecting both Electronic Payment Service Providers (EMPEs) and users. Below are the main modifications introduced:

1. Limits on Electronic Transfers: Non-bank electronic transfers made by senders through agents or points of sale may not exceed, per month, the equivalent of 40 minimum daily wages. In the case of transfers made from bank, financial, or cooperative accounts using the SIPAP system, this limit will not apply. Additionally, transactions between electronic money accounts will have a monthly maximum cap of three minimum wages.
2. Real-time Processing: Non-bank electronic transfers must be processed and recorded in real-time. The beneficiary may make partial withdrawals as long as they have an electronic money or bank account linked to the transaction.
3. Inactive Accounts: Balances in inactive accounts, those that show no activity for a period of 180 days, will be transferred to a bank account specified by the account holder. If the account holder does not have a bank account, the EMPE must open one on behalf of the holder.
4. Safeguarding Users’ Funds: Account holders’ funds will be guaranteed through the creation of a separate fund or through deposits with the BCP. These funds must cover 100% of the balance in electronic money and will be subject to daily reconciliation mechanisms.
5. Control and Supervision Measures: The BCP may request additional information from EMPEs and will be responsible for supervising compliance with the regulation. Additionally, EMPEs must implement control systems to track transactions and verify compliance with established limits.

Through Resolution No. 3, Act No. 44 dated September 16, 2024 (the “Resolution”), the Central Bank of Paraguay (“BCP“) has approved the "MIPYMES Basic Account Regulation," with the aim of promoting financial inclusion for micro, small, and medium-sized enterprises (MIPYMES).

Objective: To facilitate MIPYMES' access to certain finance services.

Key Aspects:

• MSMEs’ Basic Account (the “Basic Account”): This is a savings account in local currency that does not require a minimum opening amount or a minimum average maintenance balance.
• Requirements for opening the Basic Account: (i) Holding a valid MSME Identification Card; and (ii) not having other deposit accounts (savings or checking), except for basic personal savings accounts.
• Permitted Transactions: Includes deposits, debit card purchases, and service payments with no additional costs. Customers can make unlimited transactions through SIPAP, subject to applicable legal limits.
• Limits: Monthly credits are capped at a maximum of 20 minimum wages, and the account has a validity of up to one year. Withdrawals are limited to six per month at no charge.
• Deposit Protection: Funds in these accounts will be guaranteed by the Deposit Guarantee Fund.
• Security and Transparency: Financial institutions must apply anti-money laundering/combating the financing of terrorism (AML/CFT) protocols, ensuring compliance with SEPRELAD regulations.

The regulation will come into effect after its publication, and financial institutions must ensure its proper implementation and dissemination.

Con orgullo, nos complace compartir que nuestra firma ha sido reconocida por ITR Americas Tax Awards as “Paraguay Tax Law Firm of the Year 2024”.

Este prestigioso galardón es un testimonio del compromiso y la dedicación de nuestro equipo, siempre enfocados en ofrecer servicios legales de la más alta calidad. La confianza de nuestros clientes y colaboradores nos motiva a continuar elevando nuestros estándares de excelencia.

¡Gracias a nuestros clientes y colaboradores por su apoyo constante!

Executive Summary

Standard	Date	Content
General Resolution No. 14/2024	July 01, 2024	The National Directorate of Tax Revenues ("DNIT") established the procedures applicable to the on-board provisioning and supplies regime.
General Resolution No. 15/2024	July 04, 2024	The DNIT extended the mandatory rotation and rest period of the External Tax Auditors ("AEI").
General Resolution No. 16/2024	July 30, 2024	La DNIT estableció un mecanismo excepcional para la presentación del Estudio Técnico de Precios de Trasferencia (“ETPT”), para los contribuyentes con cierre fiscal al 31-Dic-2023.
Binding Consultation	January 2024	The DNIT ruled on how to document the write-off of inventory for purposes of deductibility of Corporate Income Tax ("IRE") and the reversal of the associated Value Added Tax ("VAT") credit.
Binding Consultation	January 2024	The DNIT set forth its position on the impact of Personal Income Tax ("IRP") on the early withdrawal of retirement contributions.

► General Resolution No. 14/2024 - The procedures applicable to the on-board provisioning and supplies regime are established.

Por medio de la Resolución General N° 14/2024 (“RG-14”), la DNIT estableció los procedimientos aplicables al régimen de aprovisionamiento a bordo y suministros a vehículos de transporte en viaje internacional, siempre que las embarcaciones aprovisionadas cuenten con matrícula o bandera de países que admitan un tratamiento similar para el abastecimiento de los trasportes paraguayos.

RG-14 regulates Decree No. 1952/2024, about which more information can be found here. Among its most relevant provisions, there are those about the treatment of supplies, deposits and tanks dedicated to the regime, as well as the requirements to be met by river transport companies and those who wish to operate under the regime, whom must comply with the following:

Prior to the arrival of the goods to be subject to the on-board supply regime, an import license must be obtained from the Ministry of Industry and Commerce ("MIC") if restrictions or prohibitions apply to them.

The corresponding Customs Administration will authorize, return and/or reject the request for the entry of goods to the on-board provisioning and supplies regime, within a term no longer than 2 working days from the filing of the request. Upon arrival of the transport vehicles, the General Customs Management ("GGA") must be requested to unload the goods with the corresponding accompaniment and supervision.

The depositary must finish the entry to deposit of the quantities unloaded. The warehouses and tanks for the storage of supplies must be authorized by the MIC and the DNIT.

The customs broker shall proceed to formalize the clearance of the goods, assigning them the customs destination of supply on board ("DAAB") while they are in the warehouse, and then destine them for consumption of the vehicles on an international trip ("AB01") or import them for consumption ("ICAB").

In the event that the goods are destined for AB01, the customs broker must formalize their clearance and present it to the GGA to assign it the status of presented, after which the customs broker will generate the complementary fractioned clearance ("AFC1") based on the declared AB01 clearance. The circulation of goods among the different customs destinations foreseen in RG-14 corresponds to the following scheme:

Goods in free circulation in the national territory —imported or of local production— that are destined for on-board provisioning will be treated as exports for consumption when they correspond to cancelled balances of AFC1 for the supply of goods to vehicles on an international trip.

Failure to comply with the provisions set forth in RG-14 shall be subject to the penalties foreseen for customs offenses and fraud, as well as for smuggling, according to the nature and seriousness of the offense; notwithstanding other sanctions established in the legislation in force.

► General Resolution No. 15/2024 - The mandatory rotation and rest period for AEIs is extended.

By means of General Resolution No. 15/2024, the DNIT extended from 5 to 7 consecutive fiscal years the mandatory rotation term of the AEI, which is the term for which taxpayers may hire the same AEI. However, it also increased from 2 to 3 the number of fiscal years of rest that must elapse to be able to hire the same AEI again.

Also, it is established that the number of years or fiscal years remaining to complete the maximum of 7 consecutive fiscal years may be added to contracts executed before the entry into force of General Resolution No. 15/2024, which means 2 things: (i) an AEI that is within the 5 consecutive fiscal years, may continue until 7 years are completed; and (ii) an AEI that is in the rest period, may ignore it and continue with the same taxpayer for the amount of fiscal years missing until completing the 7 years, ignoring the elapsed rest.

► General Resolution No. 16/2024 - An exceptional mechanism is established for the filing of the ETPT, for taxpayers with fiscal year-end as of 31-Dec-2023.

By means of General Resolution No. 16/2024 ("RG-16"), the DNIT established exceptionally that the ETPT of taxpayers with fiscal year-end as of December 31, 2023, must be filed in digital format (PDF) through the DNIT's entry desk, and must be contained in an external storage medium, which may be a USB memory stick, CD or DVD.

The working papers must be submitted in electronic spreadsheet format (with .xls, xlsx or .ods extension) with the formulas applied to allow verification of the calculations or ratios used.

The ETPT must be duly validated with the signature of the Authorized Transfer Pricing Professional ("PAPT"), because the DNIT has not yet enabled the ETPT ratification option in the Marangatu system.

The deadline for filing the ETPT was not modified, so they should have been filed in July of this year, according to the perpetual due date calendar, even though the respective means for filing were not enabled. It is noteworthy that the DNIT has corrected this with the issuance of RG-16 only on July 30 of this year, after all the due dates have passed.

In this regard, it is reminded that the filing of the ETPT after the expiration date is subject to a maximum fine established by the Executive Branch for infringements, which is Gs.1.530.000, as established in Decree No. 5046/2021.

► Answer to binding consultation on the documentation for the write-off of inventories to be deductible from the IRE and comply with the reversal of its VAT credit.

In a binding consultation answered in January of this year, the DNIT expressed its criteria on the correct way to document the inventory write-off due to decomposition or obsolescence, for both its recognition as a deductible expense for IRE and the reversal of the VAT credit from its acquisition.

In the case of the IRE, the DNIT indicated that the appropriate way to document the loss is through (1) the inclusion of the detail of the write-offs in the opinion of the external tax auditor or, if not required to hire one, (2) by means of a report from the accountant containing the same detail of the write-offs with their cost values.

In the case of VAT, the DNIT indicated that neither the auditor's nor the accountant's report is sufficient to proceed with the reversal of the tax credit, since for this purpose the corresponding VAT debit must be generated, which is done through the issuance of an invoice with the detail of the goods written off at cost price including the VAT that was used as a credit at the time of purchase.

It follows that it will not be necessary to issue an invoice to reverse the VAT credit associated with the goods of the inventory written off when their acquisition has been exempt from this tax; or, if, instead of using the VAT their acquisition as a credit, it has been integrated as a cost of the inventory written off, which raises the question of whether the reversed VAT should be integrated to the deductible expense for the inventory written-off, considering that this cancels the VAT’s credit status.

► Answer to a binding consultation on the IRP taxation of the early withdrawal of retirement contributions.

In a binding consultation issued in January of this year, the DNIT answered the doubt of an employee as to whether the amounts corresponding to the withdrawal of his retirement contributions due to the termination of his employment relationship are taxed by the IRP. On this issue, the DNIT reasoned that the amount of these contributions is nothing more than the reversal of the employee's remuneration destined to the retirement and pension system, or the social security system created or admitted by law.

That portion of the employee's remuneration is excluded from the calculation of the gross income of the IRP in the category of personal services, provided it is used as a retirement contribution. Therefore, it is natural that this portion of the employee's remuneration constitutes gross income for such tax when its destination as retirement contribution is reverted and it becomes part of the employee's assets, because in the fiscal year this happens those contributions recover their status of employee's remuneration.

That is the logic behind Decree No. 7047/2022 which, among others, amended Article 54 of the IRP regulations annexed to Decree No. 3184/2019, to expressly include in its numeral 3 the early withdrawal of the retirement contribution as other types of income taxed by IRP in the category of personal services.