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January 10, 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.


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

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


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