The explainer reports that Paraguay’s VAT applies to certain sales, services and imports, and lists rates of 5% and 10%.
According to the article, taxpayers charge VAT on sales (tax debit) and may deduct tax paid on purchases linked to their activity (tax credit). The article says the difference between the debit and credit determines whether an amount is payable to the tax authority or a credit balance remains.
The article says transactions must be supported by valid documentation and describes requirements for receipts for taxable sales and services and for purchases and expenses linked to the activity. Consult current DNIT guidance to determine which requirements apply.
According to the explainer, independent providers of personal or professional services who are not employees may claim tax credit for certain expenses, including personal healthcare; food, subject to a limit of 30% of the VAT credit included in receipts for these purchases; training related to the service; and utility and telecommunications services used exclusively to provide the taxable service. The article also lists office expenses, equipment, professional clothing, certain vehicle costs and subcontracted professional services. Consult current DNIT guidance to confirm whether each expense qualifies.
The article describes a monthly process involving the collection of sales and purchase receipts, calculation of the tax debit and credit, document checks and determination of the result. It advises filing in DNIT’s “Marangatu” system and paying by the applicable due date to avoid possible fines and surcharges. Consult current DNIT guidance on procedures and deadlines.