Paraguay's tax authority (SET) has published Decree No. 7689-2022, which extends and amends the temporary VAT relief for the transport sector that was provided by Decree No. 7355-2022. As previously reported, Decree No. 7355-2022 provided that from 12 July 2022 to 30 September 2022, the supply of qualifying transport services is subject to the standard VAT rate of 10% on 50% of the service price. Qualifying transport services as per Decree No. 7355-2022 include:

• National medium and long-distance passenger transport that is not already exempted from VAT;
• Passenger transport provided through school (bus) transport, taxis, and similar; and
• National and international cargo transport.

As provided by Decree No. 7689-2022, this VAT relief is extended until 31 December 2022. However, the qualifying services are amended with the removal of international cargo transport. The other qualifying services are retained, including national cargo transport services. Unless the VAT relief is further extended, standard VAT rules will apply from 1 January 2023 for the specified transport services.