{"id":3550,"date":"2022-11-08T17:23:16","date_gmt":"2022-11-08T21:23:16","guid":{"rendered":"https:\/\/vouga.com.py\/?p=3550"},"modified":"2023-10-16T09:55:25","modified_gmt":"2023-10-16T13:55:25","slug":"vat-deductions-are-extended-for-individuals-who-provide-services-independently","status":"publish","type":"post","link":"https:\/\/www.vouga.com.py\/en\/vat-deductions-are-extended-for-individuals-who-provide-services-independently\/","title":{"rendered":"VAT deductions are extended for individuals who provide services independently"},"content":{"rendered":"

Executive summary:<\/u><\/strong><\/p>\n\n\n\n

The Executive Branch issued Decree No. 8,175\/2022 (the \"Decree\") on November 7, 2022, whereby the list of purchases of goods and services that generate a deductible tax credit for the determination of Value Added Tax (\"VAT\") was expanded for individuals who provide personal services independently.<\/p>\n\n\n\n

The Decree allows using as a tax credit 30% of the VAT included in invoices for the purchase of food, as well as 50% of the VAT included in invoices for the lease of real estate and the provision of basic services, used jointly for the rendering of the taxable service (office, among others) and personal use (housing, among others).<\/p>\n\n\n\n

Other concepts that give rise to using the VAT tax credit are added, clarified, or limited. The Decree is effective as of November 9, 2022, since the Executive Branch published it in Official Gazette No. 217, dated November 8, 2022. Therefore, only from that moment may taxpayers apply its provisions in VAT liquidations.<\/p>\n\n\n\n

More information<\/u><\/strong>:<\/strong><\/p>\n\n\n\n

Through the Decree, the Executive Branch amended Article 19 of Decree No. 3,107\/2019, which regulated VAT. Specifically, the Decree expanded the concepts that allow individuals who provide personal services taxed by this tax to use as a tax credit the VAT borne on purchasing goods and services directly or indistinctly affected to operations taxed by the tax.<\/p>\n\n\n\n

This extension in the list of goods and services susceptible to generating VAT tax credit arose as a reaction of the Executive Branch to the current legislative dispute between the Chambers of Deputies and Senators (Legislative File D-2164401) on the extension of the deductibility of the VAT tax credit of personal service providers.<\/p>\n\n\n\n

In this respect, the Chamber of Deputies sought to allow the use of 100% of the VAT on practically all purchases as a tax credit. In contrast, the Chamber of Senators sought to establish the same limitations of the Decree. Finally, a few days ago, the version of the Chamber of Deputies prevailed, pending to be sent to the Executive Power, which had already advanced its decision to veto this law.<\/p>\n\n\n\n

Thus, the Executive Branch has transcribed in the Decree the text of the legislative amendment bill of the Senate Chamber, which it expects to prevail its veto and thus settle this discussion.<\/p>\n\n\n\n