Paraguay

Corporate legal residence is determined as the place where direction or central management takes place, unless the corporation’s charter states otherwise.

The Tax Reform establishes the residence definition in Art. 5: Residence of Legal Persons or Legal Structures.

Accordingly, the following will be considered residents in the national territory:

• Legal persons and other entities constituted in accordance with national laws.
• Foreign legal persons and other entities not constituted in accordance with national laws, which establish their domicile in the country, from their registration in the corresponding Public Registry.

Permanent establishment (PE)

The Paraguayan Tax Law establishes the definition of a PE.

The following activities may be considered as a PE in the country:

• Branches or agencies.
• A factory, industrial plant, or cattle ranch entity.
• Mine activities, or any other natural resources extraction activities.
• Civil construction or assemble activities that exceed 12 months.

If a person provides instructions related to the agreement of certain operations on behalf of a foreign entity, this operation may be considered as a PE in the country, except in cases where the mentioned instructions are related to the purchase of goods.