Circular CNV/DIR No. 023/2023 issued on May 30, 2023 by the National Securities Commission (CNV) introduces amendments to Circular CNV/DIR No. 028/2022 regarding the submission of risk rating reports by Risk Rating Companies and their access by the CNV. The main aspects of the Circular are detailed below:
Risk rating reports must be permanently available in digitalized format for access and/or delivery to the CNV. This includes the working/calculation papers and the risk matrix used, as well as the risk rating reports issued and the corresponding review report;
It is important to bear in mind that the submission of the risk rating reports must be made in accordance with the form and deadlines established in the Securities Market Regulation. In this regard, said regulation mentions that the rating report for securities market entities and issues of publicly offered securities must include an executive summary, the name of the rating entity and the date of assignment of the rating. In addition, a general description of the information used in the process and the analyses performed is required.
The rating information must contain the name and identification of the issuer, the date of authorization and registration with the CNV, the date of the financial background used, the rating and its rationale, including a projected cash flow and scenario analysis. Relevant comments or observations must also be provided, and, in the case of an issue, the series of the security must be indicated and the characteristics of the issue must be described. Likewise, the ratings and their updates must be sent by the Rating Agency to the issuing entity, the CNV and the Stock Exchange within 2 business days after their assignment. Brokerage Firms must make available to the public the ratings of the securities traded with them, as well as their updates.
The obligation to submit the risk matrix format used in a spreadsheet is established. This applies to ratings made through "cloudCNV".
CNV/DRC Circular No. 021/2023 issued on May 09, 2023 by the National Securities Commission (CNV) provides instructions related to the remission of Quarterly and Annual Periodic Documentation in accordance with the General Regulations of the Securities Market, established in CNV Resolution CG No. 35/23 of February 9, 2023. The main aspects of the Resolution are summarized below:
It is established that the e-mail address through which the aforementioned periodic documentations must be sent is estadosfinancieros@cnv.gov.py;
The format for sending the documentation is specified. In this regard, a file named as follows must be attached: "Corporate name of the Brokerage House (xxx) followed by the period and year (Month 20xx)". In addition, it is requested that the subject of the e-mail follow the same reference;
It is established that an acknowledgement of receipt will be sent to the sender to confirm receipt of the documentation sent in the same e-mail; and
In the event that the obligated entities encounter difficulties in the electronic transmission, the information must be sent in a physical medium, using a note addressed to the Incoming Desk of the National Securities Commission.
The Undersecretariat of State for Taxation (“SET”) has moved the due dates for the filing of tax returns and for the payment of certain tax obligations.
April 03, 2023
Instructive No. 04
The National Customs Directorate (“DNA”) adopted measures related to the registration process of signatures of persons involved in customs activities.
April 20, 2023
Decree No. 8,895
The regimes of (i) Value Added Tax (“VAT”) taxable base for certain goods under the tourism regime, and (ii) ISC tax rates for certain electronic products were not extended.
February 28, 2023 (Expiration)
General Resolution No. 105
The SET established the schedule of due dates for taxpayers to compulsorily adhere to the Integrated National Electronic Invoicing System (“SIFEN”) - Reminder for Group 4 and subsequent groups.
December 17, 2021 (Reminder)
More information:
► Resolution No. 129/2023 - The SET moves the due date for the filing of tax returns and for the payment of certain tax obligations
Through General Resolution No. 129/2023, the SET decided to move some due dates for filing tax returns and payment of tax obligations. This decision was made due to the non-business days of Easter Week.
Consequently, the following due dates for the filing of tax returns and the payment of tax obligations have been moved according to the following calendar:
The other maturities were not altered and are therefore governed by the Perpetual Maturity Schedule.
► Instructive No. 04/2023 – The DNA establishes rules for the registration of signatures of persons involved in customs activities
The DNA issued Instruction No. 04/2023 (the "Instruction"), whereby administrative measures are taken for registering persons related to the customs activity, regulated by Resolution DNA No. 80/2020.
The measures indicate that the registry of persons related to customs activity continues to be the only mechanism for registering and authorizing the signature registration file online. In addition, for the current fiscal period, the DNA established the option for customs brokers and forwarding agents to submit the bank reference with a savings bank instead of the current account bank reference requirement in order to register them as persons related to the customs activity.
On the other hand, DNA established that the deadline for importing companies to submit the meeting minutes with their meeting communication is June 30, 2023. This same date is also the deadline for submitting the financial statement documents (balance sheet, income statement, cash flow statement, statement of changes in equity, notes to the financial statements).
Finally, the other documents required by DNA Resolution No. 80/2020 for the registration of the signature of persons related to the customs activity must be submitted. The DNA's corporate contact e-mail address established through the Instructions is pvaa@aduana.gov.py.
► Decree No. 8,895/2022 - On April 30, the regimes for the reduction of (i) the Value Added Tax ("VAT") taxable base for certain goods under the tourism regime, and (ii) the ISC tax rates for certain electronic products expired
The Executive Power had issued Decree No. 8895/2023, whereby it resolved to extend until April 30, 2023, the validity of the following Decrees:
Decree
Provision
Decree No. 8048/2022
By which the taxable base of 5% was established for the liquidation of VAT at the time of importing goods under the tourism regime.
Decree No. 8.782/2023
Whereby the temporary modification to 0.5% of the ISC rates for cellular telephony devices and various household appliances, mentioned in paragraphs 2 and 3 of Article 12 of the Annex to Decree No. 3,109/2019, was provided for.
In accordance with the provisions of the measure related to the tourism regime, the VAT taxable base remained at 5% for the goods referred to in the annex to Decree No. 1,931/2019. Thus, the effective rate was as follows:
Period
Taxable Base
10% VAT effective tax rate
5% VAT effective tax rate
Until April 30, 2023
5%
0,5%
0,25%
The Executive Branch no longer extended these special regimes, so that as of May 01, 2023, the taxable base of the VAT applicable to the importation of goods subject to the tourism regime returned to 15% of the customs value (including customs duties), according to Decree No. 1,931/2019 and its amendments.
On the other hand, regarding the measure adopted concerning the ISC on electronic devices, the Executive Power had resolved to temporarily reduce by half the ISC rates for the following goods:
Product
Regular tax rates
Reduced tax rates
Difference
Automatic data-processing machines and units thereof; magnetic or optical readers, copying machines, hectographic machines, mimeographs, mimeographs, address printing machines, electrical machines, apparatus and equipment and parts thereof; sound recorders and reproducers, television reception apparatus, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus, video monitors and video projectors
1%
0,5%
-0,5%
Cellular telephony devices and portable terminals
1%
0,5%
-0,5%
This special regime was also not extended, so as of May 1, 2023, the 1% ISC rates for cellular telephony devices and miscellaneous household appliances will apply again, according to Decree No. 3109/2019.
► General Resolution No. 105/2021 - The calendar for taxpayers to join SIFEN was established (REMINDER for Group 4 and subsequent groups)
All taxpayers, especially those in group 4 of the SIFEN, are reminded that the SET issued General Resolution No. 105/2021 (the "RG") on December 17, 2021. Through this RG, SET established the mandatory calendar for several groups of taxpayers to adhere to the SIFEN, foreseeing ten groups with nine different due dates, with a difference of one quarter between the dates anticipated for one group and another, except for groups 1 to 3, according to the following calendar.
Groups
Date from which they are obliged
1 – “Pilot plan”
July 01, 2022
2 – “Voluntary adherence”
July 01, 2022
3 – “Compulsory phase”
January 02, 2023
4 – “Compulsory phase”
April 03, 2023
5 – “Compulsory phase”
July 03, 2023
6 – “Compulsory phase”
October 02, 2023
7 – “Compulsory phase”
January 02, 2024
8 – “Compulsory phase”
April 01, 2024
9 – “Compulsory phase”
July 01, 2024
10 – “Compulsory phase”
October 01, 2024
Obligated taxpayers from groups 4 to 10 may start issuing electronically before the established date in case they wish to do so gradually. However, once the mandatory date arrives - April 3, 2023, for group 4 - they must exclusively issue all their documents electronically since the authorization and stamping of their pre-printed or self-printed documents, granted by the SET, will cease to be valid, except for the one related to virtual withholding vouchers.
Taxpayers should take into account that they will bear the cost of the development and implementation of an electronic invoicing system, which often involves a considerable implementation time, as acknowledged by the SET in article 4 of the RG when it grants a period of up to 12 months of adaptation to those who wish to become voluntary electronic billers.
Therefore, it is crucial to be aware of whether you or your company are covered 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 or your organization are affected by this RG, you can consult the complete list of taxpayers in the following search engine. For further details or better advice, don't hesitate to get in touch with our tax professionals.
On March 28, 2023, the Secretariat for the Prevention of Money or Asset Laundering (Secretaría de Prevención de Lavado de Dinero o Bienes -SEPRELAD, by its Spanish acronym) approved, by Resolution No. 95/23, the implementation of the Module called: "Annual Information Form of the Obligated Entity and the Instructions for the Presentation", addressed to Non-Profit Organizations (NPOs). Said resolution abrogated Resolution No. 247 dated November 05, 2020, which approved the form for submission and update of data and the use instructions directed to NPOs.
The form must be submitted annually through SEPRELAD's Integral Operations Reporting System (Sistema Integral de Reporte de Operaciones - SIRO, by its Spanish acronym). The deadline for submitting the form, corresponding to fiscal year 2022, is May 31, 2023, and subsequently on May 31 of each year.
The aforementioned resolution has annexes corresponding to the form to be submitted, as well as the corresponding filing instructions.
Decree No. 9213 of April 25, 2023, has regulated Law No. 2640/05 which established the creation of the Development Finance Agency (Agencia Financiera de Desarollo – AFD, by its Spanish acronym), as amended by Law No. 6769/21, and abrogated Decree No. 7395/06.
Decree No. 9213 establishes that the AFD may grant financing to Intermediary Financial Institutions (IFIs) in legally authorized modalities and dictated by its Board of Directors. In addition, obtaining funding to grant financing to IFIs is not subject to the regulation of Law No. 6490/20 on Public Investment.
On the other hand, it indicates that the AFD may obtain loans with or without a Paraguayan government guarantee in local or foreign currency. For guaranteed loans, the AFD needs the favorable opinion of the Ministry of Finance; however, for unsecured loans, the AFD must communicate the Ministry of Finance the execution of the loan agreement within fifteen business days.
Likewise, prior to the issuance of bonds, with or without government guarantee, the AFD must communicate to the Ministry of Finance the issuance schedule, the amount and the financial conditions of each issuance. In the case of issuance of bonds with Paraguayan government guarantee, the AFD will need the prior favorable opinion of the Ministry of Finance within fifteen business days of receiving the communication. If the Ministry of Finance does not issue an opinion within the aforementioned term, it will be considered as an unfavorable opinion. The AFD may not unilaterally modify amounts, dates or financial conditions related to bonds issued with a Paraguayan government guarantee after receiving the opinion of the Ministry of Finance, and any modification will require the opinion of the Ministry of Finance.
In addition, it is established that the AFD may act as trustee, trustor and beneficiary in trust businesses related to its corporate purpose or the development of the financial, capital, insurance, pension funds or infrastructure markets. AFD may participate in trust business operations and modalities of trust permitted by Law No. 921/96 on Trust Businesses, and AFD's Board of Directors will determine the requirements and procedures for its participation in each trust business, as well as the risk limits it may assume. In addition, specific authorization from the Board of Directors is required for AFD's participation in each transaction.
Additionally, the AFD may participate in the financing of public infrastructure works through trusts. The Board of Directors will determine the form and percentage of AFD's participation based on the size, amount and complexity of the project. The AFD may also grant funds to IFIs to finance public infrastructure investment projects carried out or executed by the private sector, municipalities, local states and public companies. However, the total amount of loans must not exceed 30% of the AFD's net worth at the close of the previous year's fiscal year, and collateral or credit risk hedging instruments will be required.
In summary, the aforementioned decree establishes the provisions governing the legal nature of the AFD, its relationship with the Executive Branch and its powers. In addition, it regulates the obtention of loans and the presentation of reports for the obtention of bonds, determines the intervention in trust businesses and establishes the financing of public infrastructure. It also establishes the destination of funds and the credit certificate, as well as the regulation of foreign accounts and credits in process of liquidation. Finally, it establishes provisions for the composition, duties and powers of the Board of Directors, as well as for the admission and regulatory regime of its personnel.
The Ordinary Shareholders' Meeting of the Asuncion Stock Exchange (Bolsa de Valores y Productos de Asunción S.A. – BVA, by its Spanish acronym), which has appointed authorities for the 2023-2024 period, was held on April 19, 2023. The current composition of the board is as follows:
On 21 April 2023, Law No. 7066/2023,"Modifying Article 7 of Law No. 489/1995 "Organic Law of the Central Bank of Paraguay", as amended by Law No. 6104/2018", was published in the Official Gazette.
Pursuant to Article 6 of the Organic Law of the Central Bank of Paraguay (Banco Central del Paraguay – BCP, by its Spanish acronym), the information, data and documents of third parties held by the BCP, by virtue of its functions, are confidential, unless otherwise provided by law. Any person who performs or has performed duties at the BCP and has or has had knowledge of confidential information, data and documents of third parties is obliged to maintain the secrecy of such information. Failure to comply with this obligation shall imply criminal and other liabilities provided for by law. These persons may not give any statement or testimony, nor may they publish, communicate or exhibit information, data or documents of third parties, even after having left their service at the BCP, unless expressly mandated by law.
With regards to the aforementioned duty of secrecy, Law No. 7066/2023 amends and incorporates certain provisions related to the exceptions allowed to disclose confidential information to which they had access, as detailed below:
It clarifies that the exception to disclose information on credit institutions declared judicially insolvent shall not apply to the operations of their clients.
It expands on the information that can be requested by congressional chambers and investigation commissions, such requests for information will be granted only in relation to financial institutions, but not about the operations of their clients. The BCP shall put in place appropriate measures to ensure that information on the operations of clients of financial institutions is not disclosed.
The information requested by the Ministry of Finance shall be made through the Undersecretariat of State for Taxation, in the exercise of its functions.
Requests for information made by the Secretariat for the Prevention of Money or Asset Laundering, the State Prosecutor's Office and the prosecutors of the Prosecutor’s Office must be justified and refer to a specific person, who must be subject to any investigation or proceedings initiated by the aforementioned institutions.
The amendments and additions made by Law No. 7066/2023 provide protection to the users of the financial system and oblige both the BCP and the recipients of such sensitive information to guarantee the inviolability of the data provided.
On May 2, 2023, the Secretariat for the Prevention of Money Laundering and Asset Laundering (Secretaría de Prevención de Lavado de Dinero o Bienes - SEPRELAD, by its Spanish acronym) issued Resolution No. 158/23, by which it approves the procedures and requirements for the registration as regulated entities in the SEPRELAD Registry of the regulated entities in the sector of safe deposit boxes, transport or storage of securities or valuables, art and antiques and philatelic or numismatic investments (the Regulated Entities) through the Integral Operations Reporting System (Sistema Integrado de Reporte de Operaciones - SIRO, by its Spanish acronym), including as attachment the procedures and requirements for the registration of the same.
SEPRELAD urges such Regulated Entities to register or, as the case may be, re-register through the SIRO, establishing a deadline for re-registration through said system until July 31, 2023. Until such date, the Regulated Entities already registered under Resolution SEPRELAD No. 218/11 will be exempted from paying the registration fee.
It is worth mentioning that, according to the provisions of the aforementioned resolution, all the registration certificates of the regulated entities under Resolution SEPRELAD No. 218/1, which is repealed, will become null and void as from July 1, 2023.
On April 28, 2023, the Secretariat for the Prevention of Money or Asset Laundering (Secretaría de Prevención de Lavado de Dinero o Bienes - SEPRELAD, by its Spanish acronym) issued Resolution No. 146/23, by which it established that the following regulated entities must submit their Suspicious Transaction Reports (STRs) as well as their negative STRs through the Integral Operations Reporting System (Sistema Integral de Reporte de Operaciones - SIRO, by its Spanish acronym): (i) real estate companies; (ii) stock exchange; (iii) mutual investment and retirement fund administrators; (iv) individuals and legal entities that carry out activities of transportation or storing of securities or cash; (v) companies which main activity is development or exploitation of electronic payment systems (Entidades de Medio de Pago Electrónico - EMPEs, by its Spanish acronym); (vi) individuals and legal entities that carry out activities associated with virtual assets (Proveedores de Servicios de Activos Virtuales - PSAV, by its Spanish acronym); (vii) individuals and legal entities engaged in activities related to the trade of jewelry, precious stones and metals; (viii) pawnshops; (ix) non-profit organizations (NPOs); (x) individuals and legal entities engaged in activities related to the operation of games of chance; and (xi) individuals and legal entities that provide safe deposit box rental services.
To correctly implement and make the necessary adjustments in the operating process of the SIRO for such regulated entities, this resolution establishes a review and contingency management period of 90 calendar days as from its effective date. Within such period, the regulated entities must communicate to the National Directorate of Information Technology and Innovation of SEPRELAD all contingencies, errors, or problems in the use of the SIRO within 72 hours from the moment in which they are identified.
The resolution also establishes that delays or errors in the production and uploading of reports through the SIRO during such period, resulting from contingencies notified by the regulated entities, will be exempted from the eventual responsibilities and sanctions that could be applied to them and their compliance officers.
On April 30, 2023, the Secretariat for the Prevention of Money or Asset Laundering (Secretaría de Prevención de Lavado de Dinero o Bienes - SEPRELAD, by its Spanish acronym) issued Resolution No. 112/23, approving the procedures and requirements for registration in the SEPRELAD Registry of regulated entities in the pawnshop sector through SEPRELAD´S Integral Operations Reporting System (Sistema Integrado de Reporte de Operaciones - SIRO, by its Spanish acronym), and annexing the procedures and requirements for such registration.
Likewise, Resolution No. 112/23 urges such regulated entities to register or re-register, in case they are already registered, through the SIRO, establishing a registration or re-registration update period for regulated entities already registered under Resolution SEPRELAD No. 218/11, until June 30, 2023.
Additionally, it renders ineffective all the registration certificates of such regulated entities within the framework of Resolution SEPRELAD No. 218/11 as of July 1, 2023.
