Paraguay

Corporate - Significant developments

Last reviewed - 31 August 2020

The tax authority (SET) issued a Decree on 27 September 2017 (N° 7795/17) including the creation of the National Electronic Invoicing System (SIFEN). This means that in the short-term the issuance of electronic invoices will be mandatory for local companies (2020).

The SET issued electronic invoicing regulations during the 2018, outlining the conditions and requirements to start the pilot project to implement the SIFEN, including a Technical Manual that describes the main requirements for the electronic invoices.

14 local taxpayers integrated the Pilot Project and, in November 2018, these companies issued the first electronic invoice.

During the first semester of 2019, the SET started the second stage, called the 'Voluntary Stage', in which the local taxpayers that participate in this stage have the intention to become electronic invoice issuers.

In addition to this, the Chamber of Senators approved the Law proposal regarding the elimination of bearer shares (equities without owner identification). According to this law, the companies' shares must be nominated within two years from the date of the law enacted by the government.

The government has announced the start of the process to apply to the Organisation for Economic Co-operation and Development (OECD) as a full member.

In that context, Paraguay has issued, on 25 September 2019, Law 6380/2019 on Fiscal Reform. It includes important changes, such as the Transfer Pricing Rules, the creation of a specific income tax for non-residents, the unification of the Agricultural Income Tax and the Commercial Income Tax, and the reduction of some fees and taxes for foreign investors, among others.

The tax reform became effective as of 1 January 2020, with the exception of the transfer price that prevails as of 1 January 2021.