globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

10 January 2022

Paraguay modifies nonresident tax for digital services

Under the decree, financial institutions acting as intermediaries are no longer required to withhold nonresident tax when they collect payments for the provision for digital services.

In Decree No. 6515/21 (issued 27 December 2021), the Paraguayan Government modified the nonresident tax (INR, for its acronym in Spanish) on the provision of digital services.

Background

On 30 December 2019, the Paraguayan Government published Decree No. 3181/19, which regulates the provision of digital services and the appointment of INR withholding agents.

Decree 6515/21

With the modifications to certain articles of Decree No. 3181/19, financial institutions acting as intermediaries are no longer required to withhold the INR when they collect payments for the provision of digital services. Additionally, taxpayers that pay corporate income tax and acquire digital services are designated as INR withholding agents by Decree No. 6515/21.

Decree 6515/21 also authorizes the Paraguayan Tax Authority to regulate a new form of paying the INR on digital services. Nonresidents that provide digital services in Paraguay might, at least temporarily, have to declare and pay the INR through a special methodology yet to be designed.

These modifications took effect on 1 January 2022.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Paraguay - Auditores y Asesores de Negocios, Asunción

Gustavo Colman | gustavo.colman@py.ey.com

Manuel Fernandez | manuel.fernandez@py.ey.com

Ximena Gonzalez | ximena.gonzalez@py.ey.com

Sebastian A Acuña | sebastian.acuna@py.ey.com

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young Abogados, Latin America Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Document ID: 2022-5025

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more