{"id":3487,"date":"2022-11-18T10:21:22","date_gmt":"2022-11-18T14:21:22","guid":{"rendered":"https:\/\/vouga.com.py\/?p=3487"},"modified":"2023-10-16T10:04:57","modified_gmt":"2023-10-16T14:04:57","slug":"tax-update","status":"publish","type":"post","link":"https:\/\/www.vouga.com.py\/en\/tax-update\/","title":{"rendered":"Fiscal consequences of the new Immigration Law\u00a0\u00a0"},"content":{"rendered":"<p class=\"has-medium-font-size\"><strong><u>Executive summary:<\/u><\/strong><\/p>\n\n\n\n<p>The Executive Branch enacted and published Law No. 6,984\/2022 (the \"Immigration Law\"), establishing a new immigration regime in Paraguay effective as of October 19, 2022. This new law has special consequences for foreigners who wish to settle in the country (defined as immigrants in the new law) and who carry out remunerated activities in Paraguayan territory. Furthermore, the new law also has significant consequences for Paraguayan companies that contract with them since foreigners do not acquire tax residence in Paraguay until they obtain a permanent residence permit.<\/p>\n\n\n\n<p>The tax residency of individuals in Paraguay is particularly relevant since the enactment of Law No. 6,380\/2019 (the \"Tax Law\") since those who do not have it are subject to a higher tax burden through the tax withholdings (discounts) that Paraguayan individuals or entities are obliged to practice on the payments made to them. In addition, individuals without tax residence in the country should not be able to register as taxpayers before the Taxpayer Registry (\"Registro \u00danico del Contribuyente\" or \"RUC\").<\/p>\n\n\n\n<p>According to the Immigration Law, one of the new requirements to obtain the permanent residence permit is that whoever wishes to apply for it, must have previously received the temporary residence permit and exhausted its two-year term. If immigrants do not comply with this, they cannot access the permanent residence permit, which means that Paraguayan companies must withhold taxes from all payments made to them during that time. However, it is essential to mention that the Immigration Law has yet to be regulated, so it is expected that the regulation will clarify many points.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong><u>More information<\/u><\/strong><strong>:<\/strong><\/p>\n\n\n\n<p>To analyze the tax impact of the new Immigration Law, it is essential to start with the fact that foreign individuals need a permanent residence permit to acquire tax residency in Paraguay.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><em>New requirement to obtain the permanent residence permit<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>According to the Immigration Law, there are two categories of admission of foreigners in the country, according to their intention of settling in the country: (a) transitory stay, and (b) resident. The first category applies to foreigners who do not intend to reside in Paraguay (tourists, transit passengers, among others), while the second applies to immigrants.<\/p>\n\n\n\n<p>Within the category of admission as a resident, the new Immigration Law distinguishes four classes: (i) spontaneous or occasional residence; (ii) temporary residence; (iii) precarious residence, which applies to foreigners who are in the process of obtaining temporary residence; and (iv) permanent residence. Only the latter grants tax residency to foreigners, according to Article 2 of the Annex to Decree No. 3,181\/2019, through which the Income Tax of Non-Residents (\"INR\") is regulated.<\/p>\n\n\n\n<p>As of the Immigration Law, it was established that the immigrant could only access the permanent residence permit after first being in Paraguay with temporary residence for the entire term of this type of residence, which is of two years. However, the law needs to be more explicit about the need to comply with the entire period of two years of temporary residence or whether, on the contrary, it is possible to obtain the permanent residence permit by complying with a temporary residence of a shorter duration. In the latter case, it is necessary to clarify the minimum period for the temporary residence to allow applying for the permanent residence permit. It is expected that the regulations of the new Immigration Law will clarify this.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><em>Exceptions to the requirement to comply with the prior temporary residence to access permanent residence<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>The Immigration Law provides for two situations in which a foreigner may have direct access to a permanent residence permit without the need to have previously complied with the term of temporary residence:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>Investors or capitalists with investments in Paraguay who can prove reliably to have made investments in the country, as established by the Immigration Law, its regulations, and other applicable laws.<\/li>\n\n\n\n<li>The following foreign relatives of a repatriated Paraguayan national: spouse, children, and grandchildren (up to 18 years of age). In addition, the spouses of the child of the repatriated Paraguayan national are also eligible for this benefit.<\/li>\n<\/ol>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><em>Taxes withheld from non-residents<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>As long as foreign individuals do not acquire a permanent residence permit (evidenced by the respective card), they are considered non-residents for tax purposes. Therefore, Paraguayan companies that make payments to them or make funds available to them for the rendering of services or sale of goods in Paraguay must withhold INR<a href=\"#_ftn1\" id=\"_ftnref1\">[1]<\/a> and Value Added Tax (\"VAT\")<a href=\"#_ftn2\" id=\"_ftnref2\">[2]<\/a>from the payments. In addition, Paraguayan companies that distribute profits, dividends or yields, must withhold the Tax on Dividends and Profits (\"IDU\u201d) applying a higher tax rate (15%) than the tax rate that corresponds to residents (8%).<\/p>\n\n\n\n<p>The permanent residence permit is also necessary for the foreign individuals to register as a taxpayer in the RUC and thus liquidate their taxes, according to General Resolution No. 79\/2021 issued by the Undersecretariat of State for Taxation (the \u201cTax Authority\u201d or \"SET\"). Furthermore, the temporary residence permit cannot be used for registration before the RUC; only the permanent residence permit and the registration with the proof of refugee application serve this purpose.<\/p>\n\n\n\n<p>It should be noted that the Migration Law also affects Paraguayan companies that contract with immigrants without tax residence in Paraguay since, as they are obliged to withhold INR and VAT, they are jointly and severally liable for these taxes. This means that the SET can claim these taxes from Paraguayan companies that do not comply with their obligation to withhold taxes on payments made to foreign individuals without tax residence.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><em>Taxes applicable upon obtaining the permanent residence permit.<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<p>The immigrants are considered a resident for tax purposes from the moment they acquire the permanent residence permit in Paraguay, which is proved with the respective card. This implies that the Paraguayan companies that receive their services and pay them in return are no longer obliged to withhold INR or VAT<a href=\"#_ftn3\" id=\"_ftnref3\">[3]<\/a> when foreigners acquire a permanent residence permit.<\/p>\n\n\n\n<p>Thus, from the moment foreigners acquires tax residence in Paraguay by obtaining the permanent residence, they are the only ones who are obliged to comply with their tax obligations, so they must register as taxpayers with the SET and comply with their tax obligations on their initiative. Moreover, depending on the characteristics of their activity and the income he obtains from it, they may or may not be obliged to register as a VAT, Personal Income Tax (\"IRP\"), and\/or Corporate Income Tax (\"IRE\") taxpayers.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a href=\"#_ftnref1\" id=\"_ftn1\">[1]<\/a> The INR establishes a general rate of 15% that is applied on the net income, which is established in accordance with the Tax Law. For the rendering of personal services, the effective INR rate is 10.5% on the amounts paid or made available to the non-resident.<\/p>\n\n\n\n<p><a href=\"#_ftnref2\" id=\"_ftn2\">[2]<\/a> VAT applies a general rate of 10% on the sale of goods and the rendering of services performed independently.<\/p>\n\n\n\n<p><a id=\"_ftn3\" href=\"#_ftnref3\">[3]<\/a> It could happen in cases of personal services that VAT should not be withheld long before obtaining tax residence if the immigrant without permanent residence is registered as a dependent worker before the Social Security Institute. Based on this registration, these services are characterized as provided in a relationship of dependency. Therefore, there is an assumption of non-taxability of VAT on the payments made as remuneration for such dependent work.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button has-custom-width wp-block-button__width-50 has-custom-font-size is-style-outline has-medium-font-size is-style-outline--1\"><a class=\"wp-block-button__link has-vivid-red-color has-text-color wp-element-button\" href=\"https:\/\/vouga.com.py\/wp-content\/uploads\/2022\/11\/VOUGA_NOVEDADIMP811_INGLES-1-3.pdf\" style=\"border-radius:0px\" target=\"_blank\" rel=\"noreferrer noopener\">Download<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>","protected":false},"excerpt":{"rendered":"<p>Resumen ejecutivo: El Poder Ejecutivo promulg\u00f3 y public\u00f3 la Ley N\u00b0 6.984\/2022 (la \u201cLey de Migraciones\u201d), que establece un nuevo r\u00e9gimen migratorio en Paraguay con vigencia desde el 19 de octubre de 2022. Esta nueva ley trae especiales consecuencias para los extranjeros que desean radicarse en el pa\u00eds (definidos como inmigrantes en la nueva ley) [&hellip;]<\/p>","protected":false},"author":1,"featured_media":3494,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":52,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consecuencias fiscales de la nueva Ley de Migraciones\u00a0\u00a0 - Vouga Abogados<\/title>\n<meta name=\"description\" content=\"El Poder Ejecutivo promulg\u00f3 y public\u00f3 la Ley N\u00b0 6.984\/2022 (la \u201cLey de Migraciones\u201d), que establece un nuevo r\u00e9gimen migratorio en Paraguay con vigencia desde el 19 de octubre de 2022. Esta nueva ley trae especiales consecuencias para los extranjeros que desean radicarse en el pa\u00eds (definidos como inmigrantes en la nueva ley) y que realizan actividades remuneradas en el territorio paraguayo. La nueva ley tambi\u00e9n trae importantes consecuencias para las empresas paraguayas que contraten con ellos, ya que los extranjeros no adquieren residencia fiscal en Paraguay mientras no obtengan el permiso de residencia permanente.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vouga.com.py\/en\/tax-update\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consecuencias fiscales de la nueva Ley de Migraciones\u00a0\u00a0 - Vouga Abogados\" \/>\n<meta property=\"og:description\" content=\"El Poder Ejecutivo promulg\u00f3 y public\u00f3 la Ley N\u00b0 6.984\/2022 (la \u201cLey de Migraciones\u201d), que establece un nuevo r\u00e9gimen migratorio en Paraguay con vigencia desde el 19 de octubre de 2022. Esta nueva ley trae especiales consecuencias para los extranjeros que desean radicarse en el pa\u00eds (definidos como inmigrantes en la nueva ley) y que realizan actividades remuneradas en el territorio paraguayo. La nueva ley tambi\u00e9n trae importantes consecuencias para las empresas paraguayas que contraten con ellos, ya que los extranjeros no adquieren residencia fiscal en Paraguay mientras no obtengan el permiso de residencia permanente.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vouga.com.py\/en\/tax-update\/\" \/>\n<meta property=\"og:site_name\" content=\"Vouga Abogados\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-18T14:21:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-16T14:04:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vouga.com.py\/wp-content\/uploads\/2022\/10\/fotoarticulovouga_Mesa-de-trabajo-1-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1114\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"dev_\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"dev_\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/\",\"url\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/\",\"name\":\"Consecuencias fiscales de la nueva Ley de Migraciones\u00a0\u00a0 - Vouga Abogados\",\"isPartOf\":{\"@id\":\"https:\/\/www.vouga.com.py\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vouga.com.py\/wp-content\/uploads\/2022\/10\/fotoarticulovouga_Mesa-de-trabajo-1-scaled.jpg\",\"datePublished\":\"2022-11-18T14:21:22+00:00\",\"dateModified\":\"2023-10-16T14:04:57+00:00\",\"author\":{\"@id\":\"https:\/\/www.vouga.com.py\/#\/schema\/person\/46cc2252086d4c4e5986413563b4caf5\"},\"description\":\"El Poder Ejecutivo promulg\u00f3 y public\u00f3 la Ley N\u00b0 6.984\/2022 (la \u201cLey de Migraciones\u201d), que establece un nuevo r\u00e9gimen migratorio en Paraguay con vigencia desde el 19 de octubre de 2022. Esta nueva ley trae especiales consecuencias para los extranjeros que desean radicarse en el pa\u00eds (definidos como inmigrantes en la nueva ley) y que realizan actividades remuneradas en el territorio paraguayo. La nueva ley tambi\u00e9n trae importantes consecuencias para las empresas paraguayas que contraten con ellos, ya que los extranjeros no adquieren residencia fiscal en Paraguay mientras no obtengan el permiso de residencia permanente.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vouga.com.py\/novedad-impositiva\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/#primaryimage\",\"url\":\"https:\/\/www.vouga.com.py\/wp-content\/uploads\/2022\/10\/fotoarticulovouga_Mesa-de-trabajo-1-scaled.jpg\",\"contentUrl\":\"https:\/\/www.vouga.com.py\/wp-content\/uploads\/2022\/10\/fotoarticulovouga_Mesa-de-trabajo-1-scaled.jpg\",\"width\":2560,\"height\":1114},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vouga.com.py\/novedad-impositiva\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Portada\",\"item\":\"https:\/\/www.vouga.com.py\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Consecuencias fiscales de la nueva Ley de Migraciones\u00a0\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vouga.com.py\/#website\",\"url\":\"https:\/\/www.vouga.com.py\/\",\"name\":\"Vouga Abogados\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.vouga.com.py\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.vouga.com.py\/#\/schema\/person\/46cc2252086d4c4e5986413563b4caf5\",\"name\":\"dev_\",\"sameAs\":[\"https:\/\/www.vouga.com.py\"],\"url\":\"https:\/\/www.vouga.com.py\/en\/author\/dev_\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Consecuencias fiscales de la nueva Ley de Migraciones\u00a0\u00a0 - Vouga Abogados","description":"The Executive Branch enacted and published Law No. 6,984\/2022 (the \"Immigration Law\"), establishing a new immigration regime in Paraguay effective as of October 19, 2022. 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