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Paraguay

14 January 2022

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Paraguay Extends VAT and Consumption Tax Relief for COVID-19

Paraguay's tax authority (SET) has published Decree No. 6440/2021, which further extends the validity of VAT and selective consumption tax (ISC) relief measures implemented during the COVID-19 pandemic. This includes:

  • The special VAT regime for tourism, restaurant, and accommodation services originally introduced by Decree No 3881/2020 and Decree No. 3967/2020, which generally provides that for the supply of these services, the standard VAT rate of 10% is applied on 50% of the service price;
  • The special VAT regime for the provision of immovable property leasing services for business activities originally introduced by Decree No 5232/2021, which generally provides that VAT taxpayers leasing real estate for business activities will calculate and pay the corresponding VAT by applying the 10% VAT rate on 50% of the taxable amount; and
  • The reduced ISC rates for certain products that were provided through Decree No. 5585/2021, including reduced rates of 2% to 7% for beers and ciders with and without alcohol, fruit wines, champagne, whiskey, rum, and other spirits, and perfumes and cosmetics.

Previously scheduled to expire 31 December 2021, the VAT and ISC relief measures are now extended to 31 March 2022. From 1 April 2022, standard rules for the sale and import of such goods and services will apply.

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