Tax rate by region Paraguay

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Paraguay applies a standard 10% Value Added Tax (VAT) alongside an effective 4.5% Digital Services Tax on non-resident digital service providers, which is administered by the Dirección Nacional de Ingresos Tributarios (DNIT). Non-resident digital businesses must register with the DNIT via a local tax representative and submit electronic transaction reports on a quarterly cycle, though taxes are often collected at the source by local financial intermediaries. Concurrently, the country is rapidly digitizing its domestic economy through a phased rollout of the SIFEN electronic invoicing system, which mandates structured XML invoicing for all newly registered entities, state suppliers, and sequential waves of designated taxpayers.

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Paraguay

Paraguay applies a 10% Value Added Tax (VAT) plus a 4.5% Digital Services Tax on non-resident digital service providers. From 1 January 2022, non-residents must register with the SET (now part of DNIT), appoint a local tax representative, and report transactions quarterly. 

Official government link: Subsecretaria de Estado de Tributacion

10.00%

E-products and services VAT/Sales tax rate

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Before first sale

Online registration possible

Yes 

Local representative needed

Yes

Registration procedure

Appoint a local tax representative; register with SET (now DNIT); representative reports transactions quarterly

List of digital and electronic services liable for tax

Streaming, ride-hailing apps, digital advertising, and other non-resident digital services

Penalties

Penalties imposed by SET / DNIT for failure to register on time, late filing, or underpayment (per Paraguay tax code)

Registration threshold

No threshold

Filing interval

Monthly

Filing deadline

Between the 7th and 25th of the month following the transaction.

E-invoicing requirements

Yes

Record keeping

5 years 

How-To Guides: Paraguay SaaS VAT

Step: 1 Threshold

Paraguay’s VAT system is governed by the Law No. 6380/2019 and its implementing regulations, including the Decree No. 3107/2019.

 

There is no threshold for nonresident digital service providers. Registration is mandatory from the first sales if selling B2C.

Step: 2 Business Registration

Foreign providers with a local representative must register with the Dirección Nacional de Ingresos Tributarios (DNIT), formerly known as SET. Registration is done via the Marangatú portal.

Step: 3 TIN/VAT Number

The tax ID is the RUC (Registro Único de Contribuyentes). Nonresidents selling B2C are issued a specific RUC for digital service providers.

Step: 1 Standard Rate

Standard VAT (IVA) in Paraguay is 10%.

Step: 2 Rate Formula

To calculate your tax amounts, use the following formula:

 

Tax Amount = Net Price x 10 %

 

Step: 3 Reverse Charge (B2B)

Applies. For B2B sales, the foreign provider does not charge VAT. The local Paraguayan business customer is responsible for self-assessing and paying the tax (IVA) via the reverse charge mechanism.

Step: 1 Selling B2C

Nonresident providers must charge 10% VAT. If the provider is not registered, local financial intermediaries (banks/credit card issuers) are legally required to withhold the 10% VAT at the time of payment.

Step: 2 Selling B2B

Tax is not charged by the seller. The seller must collect and verify the buyer’s RUC to prove it is a B2B transaction.

Step: 3 Invoice Requirements

Invoices must be issued as DTE (Electronic Tax Documents) via the SIFEN system and must include:

  • Supplier Name & Address
  • Supplier Tax ID (if registered)
  • Buyer’s RUC (for B2B)
  • Sequential Invoice Number
  • Date of Issue
  • Detailed Description (SaaS/Digital Service)
  • Total Amount and VAT rate (10% or “Reverse Charge” note for B2B)

Step: 1 Filing Interval

Taxes are expected to be filed monthly.

Step: 2 Filing Deadline

The deadline is determined by the “Perpetual Calendar” based on the last digit of the RUC. Generally, this falls between the 7th and 25th of the month following the transaction.

Step: 3 Submission

Filings are submitted via Form 120 (IVA) or Form 90 (for nonresidents) through the Marangatú portal. Payments are made via electronic bank transfer or authorized payment agents (e.g., Aquí Pago).

Step: 4 Record Keeping

Records must be kept for 5 years (statute of limitations).

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Paraguay’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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