The Paraguayan State, through the Subsecretaria de Estado de Tributación (“SET”) has adopted the following measures in line with the government's efforts to counter the effects of COVID-19 on the Paraguayan economy.
Below, a summary of the provisions enacted by the tax authority:
1. General Resolution N°43/20
The office of the Paraguayan tax authority (Subsecretaria de Estado de Tributacion or “SET”) is closed to the general public until March 26, except for exceptional cases.
To this end, they enabled the following electronic procedures from March 11 to March 26: obtaining or cancelling a taxpayer number (Registro Unico de Contribuyente or “RUC”), data updates, consults, initial required documentation (Documentacion Inicial Requerida or “DIR”), enforcement of bank guarantees, among others.
It also set forth the suspension of administrative deadlines that begin or expire during the period from March 12 to March 26, relating to the processes of determination, application of sanctions, administrative summaries related to tax return and appeals.
2. General Resolution N°44/20
Through this resolution, the submission of the external audit report is postponed until December 31st, 2020, for those taxpayers who close the fiscal year on December 31st, 2019.
3. General Resolution N°45/20
The validity periods of the Tax Compliance Certificates ("CCT") issued between March 18 and June 30, are extended for a period of 90 days. The deadlines for submitting the Purchase and Sales Books through the "Hechauka” system for the months of March, April and May were also postponed
4. Decree N°3457/20
An exceptional and transitory regime for payment of personal income tax payment (Impuesto a la Renta Personal or "IRP") is set forth, as well as a regularization period for complying with tax obligations of previous fiscal years (2019 or earlier). Hence, the following rules shall apply:
a) Minimum initial payment of an equivalent to 20% of the debt, which must be made within 2 days from the day of filing the request for ease of payment.
b) Annual financing interest rate of 0%.
c) Up to 5 monthly installments.
It is also established that until June 30, no penalty shall be applied for non-complying with formal obligations. Furthermore, until said date, the fines provided for in General Resolution No. 13/19 shall not apply to taxpayers who comply lately with their tax obligations
5. Decree No. 3.477/20
Provides a special Value Added Tax (“VAT”) regime for the import and sell of basic products set forth in the COVID 19 prevention protocols.
Products of the following tariff nomenclatures: 2828.90.11, 3808.94.19, 3808.9429, 4015.11.00, 6210.10.00, 6307.90.10, 6307.90.90 and 9020.00.90 for products derived from sodium hypochlorite (chlorine), clogged for surgery felt or unwoven fabric, felt caps, unwoven fabric cover, non-woven fabric cover and other cover caps, will enjoy a reduction in VAT application.
Importers of the above products shall pay VAT at the Paraguayan customs authority (Direccion Nacional de Aduanas or “DNA”) applying the 10% rate on the customs value of the product. This represents a direct VAT cost of 5% for imports.
Those who sell the products on the local market will apply the 10% rate on a taxable basis of 50% of the value of the product, representing a direct tax cost of 5%. The seller must document the transaction issuing a legal invoice and entering 50% of the value of the product in the exempt column and 50% in the tax column.
6. General Resolution No. 46/20
The due dates for the determinative and informative returns and for the payment of tax obligations that were due on March, shall expire in April, according to the last number of the RUC.
The due date for payment of the current eases of payment, and the third and fourth installments of advances in the income of business, industrial or services activities (Impuesto a la Renta de Actividades Comerciales, Industriales o de Servicios or "IRACIS") that expire between 23 and 25 March 2020, will due on April 1st.
All deadlines for the administrative processes and procedures carried out by the SET are suspended from March 23 to March 31.
7. Decree No. 3.480/20
Sets forth an exceptional and temporary regime of payment facilities for the 2019 fiscal year so that taxpayers of IRACIS and IRAGRO can comply with their fiscal obligations. This Decree will be in force until May 31st, 2020 and contains the following provisions:
1. requires a minimum payment of 20% over the debt. The initial payments must be entered within the first 2 (two) calendar days counting from the following day of the submission of the request;
2. interest rates of 0% for the installments; and,
3. up to 5 (five) monthly installments.
Furthermore, the first payment in advance of the Corporate Income Tax (“IRE”) is postponed until July 2020 for the 2020 fiscal year.
8. General Resolution No. 47/20
The financial entities and cooperatives shall require the CCT, Certificate of Compliance in Dispute ("CCC") and the Certificate of Not Being a Taxpayer ("CNSC") only for new credits or renewal of credits that amount at least PYG 150,000,000 (approximately USD 22,500).
In the eases of payment for tax obligations, the period of accrual of unpaid installments is extended to 6 (six) and/or 180 days of delay for the eases of payment to be ineffective in relation to the unpaid amount, in which case the taxpayer may request a new ease of payment if the ones in force were void.
The issuance of debt certificates in the ongoing procedures for collection of tax debts is suspended, as well as the initiation of new collection processes.
These measures will be in force until June 30.
9. Law 6.524/20
✓ Formalization of Micro, Small and Medium Size Enterprises: Formalization through a registration and data update process with the SET.
✓ Extension of tax maturity periods: Extension of tax maturity periods corresponding to sworn declarations and total and partial payments of all taxes that are settled according to Law 6380/19, from January 1, 2020, and all those taxes of the fiscal year 2019 pending settlement. This will not be applicable for the settlement of withholdings and earning, which must continue to be paid in a monthly basis on the established due date.
✓ Suspension of new filings: new filings for tax credit returns and resolutions that in process are suspended, except for the accelerated regime, during the validity of the state of emergency (for this year fiscal). The State of Emergency Law does not clarify if this suspension also covers the expiration period of credits, nor if credits will be returned with interest for those cases in which the taxpayer has ongoing processes.
✓ Extension to call a meeting that approves the distribution of dividends: an exceptional extension of the term is given to call a shareholders' meetings, so that these can be held within the first 6 months at the end of the fiscal year.
✓ Extension for dividend distribution tax: Regardless of the date of the shareholders’ meeting that approves the distribution of dividends, taxpayers affected by the Dividend and Profit Tax (“IDU” for its Spanish acronym) will have until August 31 2020 to report and make the corresponding withholdings through the Marangatu System.
10. General Resolution No. 48/2020
The measures taken by the SET through General Resolution 43/2020 are extended until April 12, 2020. In this sense, the SET will not be open to the public until April 12, 2020. Also, the following processes will be processed online: registration in the RUC and the update of taxpayers’ information, RUC cancellation, attention to inquiries, Documentación Inicial Requerida (DIR), execution of the bank guarantees, among others.
In addition, the procedural deadlines relating to determination processes, sanctions, administrative summaries regarding requests for the repayment of tax credits and appeals are also suspended.
11. General Resolution No. 49/20
The SET has determined to that the due date for the submission of the declaraciones juradas determinativas e informativas and the payment of tax obligations be reassigned according to the following details:
1. The filing and payment of the tax obligations for the month of February 2019 for taxpayers with RUC No. ending in 7, 8 and 9 which have been initially extended by General Resolution No. 46/2020, may be submitted on the 4th, 5th and 6th of May respectively.
2. The filing of the IRACIS and IRAGRO Affidavits for the fiscal year ended December 31, 2019 must be fulfilled in June 2020 in accordance with the current perpetual calendar.
3. The submission of the Declaración Jurada Determinativa (“DJI”) and the payment of the IRE Presunto, Tributo Único Maquila, IVA, ISC General, ISC Combustibles and the Informe Productos Derivados del Tabaco for the fiscal period of March 2020 must be fulfilled in May 2020 in accordance with the current perpetual calendar.
The DJI for price adjustments for the fiscal period February 2020, must be fulfilled in May 2020, in accordance with the perpetual calendar in force.
4. Taking into account the provisions of Article 16 of Law 6524/2020 where the call to shareholders’ meetings is exceptionally extended for the first 6 (six) months at the end of the fiscal year, taxpayers who decide to distribute their profits, dividends or returns in 2020 will be able to issue virtual tax withholding receipts for the Impuesto a la Distribución y Utilidades ("IDU") from August 01 to 31, 2020. Payment of the IDU can be made until 13 September 2020.
For taxpayers who have already paid their owners, partners or shareholders by August 01, 2020 must issue the tax withholding receipt and make the payment in accordance with the provisions of General Resolution No. 31/2019.
5. Exceptionally, extend the maturity for payments of Impuesto a la Renta Empresarial ("IRE") advances. Payment must be made taking into account the current perpetual calendar according to the following details:
12. General Resolution No. 50/20
A special procedure to register in the RUC is established for micro and small individual enterprises for the Corporate Income Tax under the Simplified Regime for Small Enterprises (“RESIMPLE”).
The documents required for this are the following:
1. Valid Identification Document; and,
2. Any invoice of public or private services (such as public water, electric energy, fixed-line telephony o mobile, cable television) or bank statement or of cooperatives, settlement of the tax on property, rental agreement or any other documents were the location of the domicile is stated. In every case, the date of expedition of the invoice for services or of the documents will not surpass ninety (90) business days, at the time of the submission of the request.
When the request is approved, the taxpayer will have the chance to download the “proof of registration in the RUC” and the “Taxpayer Identification Document” through the webpage of the SET in the section “Services online without access password”, “consultations”/”consult taxpayer identification document, proof of the RUC”. It is possible to access through the mobile application “PYTYVO”.
If the data or documents annexed by the taxpayer are not in accordance with the provisions of the resolution, the SET will reject the request submitted and will notify the taxpayer through the email declared with the submission, in order to file a new request when this corresponds.
The SET will gradually summon taxpayers within five days from the call, for them to present the physical documents submitted, subscribe the request of inscription in the RUC under the IRE RESIMPLE, as well as the document to record the will to obtain the user access code.
The form No. 601 “Request to register in the RUC under the IRE RESIMPLE” is authorized, the format will be available in the webpage of the SET.