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Extension of regulations on special regimes for VAT liquidation

Terms on special and transitory regimes for the VAT liquidation in different services rendered are extended.

On March 31st, Decree No. 6885 was published in the Official Gazette of Paraguay, extending the validity of Decrees Nos. 3881/2020, 3967/2020, and 5232/2021, which establish special and transitory regimes for the liquidation of the Value Added Tax (VAT), and Decree No. 5585/2021, which temporarily modifies the rates of the Selective Consumption Tax (ISC) for certain products and Article 2° of Decree No. 3781/2020, which exceptionally establishes the VAT taxable base for the importation of goods subject to the tourism regime is amended.

1. Regulatory background

That, Decree No. 3881/2020 provides for the implementation of special and transitory regimes in the Value Added Tax on the rendering of accommodation services in hotels, restaurants, supply of events, tourist packages with a destination in the country, and leasing of real estate for such purposes, and establishes transitory measures for their liquidation. Likewise, Decree No. 3967/2020 establishes the provision of rural lodging services, tourist transportation, tourist guides, and event organization services.

Finally, Decree No. 5232/2021 provides for the leasing of real estate for business activities.

2. Special and transitory regimes

Given the characteristics of the sectors that were most affected by the pandemic, the Executive Power resolved to establish special and transitory VAT liquidation regimes for the provision of accommodation services in hotels and rural establishments, and others.

Likewise, Article 2 of Decree No. 3781/2020, as amended by Decree No. 6441/2021, exceptionally established the VAT taxable base at the time of importation of goods to be 10% of the amount provided for in numeral 7 of Article 85 of Law 6380/2019.

3. Extension of regulations

The following Decrees are hereby extended until June 30, 2022:

  • Decree No. 3881, on implementation of special and transitory VAT regimes on the provision of accommodation services in hotels, restaurants, supply of events, tourist packages with a destination in the country, and leasing of real estate for such purposes.
  • Decree No. 3967, provides for the special VAT regime on the rendering of rural lodging services, tourist transportation, tourist guides, and event organization.
  • Decree No. 5232, provides for the special VAT liquidation regime for the lease of real estate used for business activities.

On the other hand, the term of Decree No. 5585, which temporarily modifies the ISC rates for certain products, is extended until June 30, 2022.

4. Disposal and importation of goods

As of July 1, 2022, the disposal and importation of goods and the rendering of services that fall under the provisions of articles 1 and 2, detailed above, will be governed by the general rule of the corresponding tax. 

Source: Gaceta Oficial 01/04/22

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