Paraguay IVA

Skill Metadata

• Jurisdiction — Paraguay
• Jurisdiction Code — PY
• Primary Legislation — Ley 125/91 (Ley de Reforma Tributaria), Libro III -- IVA (as amended by Ley 6380/2019)
• Supporting Legislation — Decreto 1030/2020 (Reglamento IVA); Resoluciones SET
• Tax Authority — Subsecretaria de Estado de Tributacion (SET)
• Filing Portal — https://www.set.gov.py (Marangatú System)
• Contributor — Open Accounting Skills Registry
• Validated By — Deep research verification, April 2026
• Validation Date — April 2026
• Skill Version — 1.0
• Confidence Coverage — Tier 1: rate classification, return form, input recovery. Tier 2: partial exemption, maquila, IVA agropecuario. Tier 3: complex structures, rulings.

Confidence Tier Definitions

• [T1] Tier 1 -- Deterministic. Apply exactly as written.
• [T2] Tier 2 -- Reviewer Judgement Required. Flag and present options.
• [T3] Tier 3 -- Out of Scope / Escalate. Do not guess.

Step 0: Client Onboarding Questions

1. Entity name and RUC [T1]
2. Tax regime [T1] -- IRE General, IRE Simple, RESIMPLE, or IRP
3. Filing period [T1] -- monthly (standard)
4. Industry/sector [T2] -- agriculture (IVA Agropecuario), manufacturing, maquila
5. Does the business make exempt supplies? [T2]
6. Does the business import goods? [T1]
7. Is the business under maquila regime? [T2]
8. Credit balance brought forward [T1]

If items 1-3 are unknown, STOP.

Step 1: IVA Rate Structure [T1]

• Legislation — Ley 125/91, Article 91 (as amended by Ley 6380/2019). (Ley 125/91, Article 91)

Standard Rate

Standard Rate (Ley 125/91, Article 91)

Rate	Application
10%	Standard rate on most taxable supplies of goods and services [T1]

Reduced Rate

Reduced Rate (Ley 125/91, Article 91)

Rate	Application
5%	Agricultural products (unprocessed), pharmaceutical products, certain basic goods, residential rental, interest on loans, sale of real estate [T1]

Items at Reduced Rate (5%) [T1]

• Items at Reduced Rate (5%) — - Unprocessed agricultural and livestock products (first sale) - Pharmaceutical and medicinal products - Capital goods (machinery, equipment for production) - Residential rental income - Interest and commissions on financial loans - Sale of real estate (first transfer) - Public passenger transportation (Ley 125/91, Article 91)

Exempt Supplies [T1]

• Exempt goods and services — Exempt goods: - Fresh fruits and vegetables (in their natural state, sold by producer) - Live animals (sold by producer) - Basic food products: bread, yerba mate, fresh milk, eggs (specific list) - Fuel and petroleum derivatives (subject to specific tax -- ISC) - Books, newspapers, educational materials - Agricultural inputs (certain seeds, fertilizers) Exempt services: - Educational services (authorized institutions) - Health/medical services (public institutions, hospitals) - Financial intermediation (deposits, certain banking services) - Residential rental (up to certain value -- but NOTE: rental above threshold is at 5%) [T2] - Public services (water, electricity -- domestic consumption below threshold) (Ley 125/91, Article 83)

2a. Determine Transaction Type [T1]

• Determine Transaction Type — - Sale (IVA debito -- output) or Purchase (IVA credito -- input) - Salaries, IPS (social security), dividends, loans = OUT OF SCOPE

2b. Determine Counterparty Location [T1]

• Determine Counterparty Location — - Domestic (Paraguay) - MERCOSUR: Argentina, Brazil, Uruguay - International

2c. Determine IVA Rate [T1]

• Determine IVA Rate — - 0% (export), 5% (reduced), 10% (standard), or exempt

Step 3: IVA Return Form Structure (Formulario 120) [T1]

Filed monthly via Marangatú system.

IVA Debito (Output)

IVA Debito (Output)

Line	Description
1	Ventas gravadas al 10%
2	IVA debito al 10%
3	Ventas gravadas al 5%
4	IVA debito al 5%
5	Exportaciones (0%)
6	Ventas exentas
7	Total ventas
8	Total IVA debito (Line 2 + Line 4)

IVA Credito (Input)

IVA Credito (Input)

Line	Description
9	IVA en compras al 10%
10	IVA en compras al 5%
11	IVA en importaciones
12	Total IVA credito
13	Ajustes
14	IVA credito neto

Liquidacion

Liquidacion

Line	Description
15	IVA a pagar (Line 8 - Line 14)
16	Saldo a favor anterior
17	Retenciones
18	Total a pagar / saldo a favor

Step 4: IVA Withholding [T1]

• Legislation — Resoluciones SET. (Resoluciones SET)

Withholding Agents [T1]

Withholding Agents (Resoluciones SET)

Agent Type	Rate
Government entities	30% of IVA invoiced [T1]
Designated large taxpayers	30% of IVA [T1]
Exporters	30% of IVA on local purchases [T1]
Purchasers from occasional taxpayers	100% of IVA [T1]

Step 5: Reverse Charge on Imported Services [T1]

• Reverse Charge on Imported Services — When a Paraguay registered person receives services from a non-resident: 1. Self-assess IVA at applicable rate (10% or 5%) [T1] 2. Report as output IVA [T1] 3. Claim as input if for taxable operations [T1] 4. Net = zero for fully taxable businesses [T1] (Ley 125/91, Article 82)

Step 6: Deductibility Check

Blocked Input IVA (No Recovery) [T1]

• Blocked Input IVA categories — - Motor vehicles -- passenger vehicles (exception: rental, taxi, transport) [T1] - Entertainment -- meals, recreation (unless hospitality) [T1] - Personal use [T1] - Exempt operations -- costs attributable to exempt supplies [T1] - Purchases without valid comprobante (factura, boleta, autofactura) [T1] (Ley 125/91, Article 86)

Invoice Requirement [T1]

• Invoice Requirement — - Paraguay has implemented SIFEN (Sistema Integrado de Facturacion Electronica) - Electronic documents (DE -- Documento Electronico) required for most taxpayers - Valid timbrado (authorization) required for paper invoices (being phased out) - Input IVA only deductible with valid fiscal document

Partial Exemption [T2]

• Recovery % — Recovery % = (Taxable Sales / Total Sales) * 100

Step 7: Key Thresholds [T1]

Key Thresholds

Threshold	Value
Mandatory IVA registration	All IRE taxpayers (companies, sole proprietors above threshold)
RESIMPLE	Micro and small enterprises with income up to PYG 80,000,000/year -- simplified regime [T2]
Electronic invoicing (SIFEN)	Mandatory phased rollout

Step 8: Filing Deadlines and Penalties [T1]

• Legislation — Ley 125/91; Ley 6380/2019; Codigo Tributario. (Ley 125/91; Ley 6380/2019; Codigo Tributario)

Filing Deadlines [T1]

Filing Deadlines

Last Digit of RUC	Due Date (of following month)
0	7th
1	9th
2	11th
3	13th
4	15th
5	17th
6	19th
7	21st
8	23rd
9	25th

Penalties

Penalties

Violation	Penalty
Late filing	Multa (fine) per SET resolution [T1]
Late payment	Interest at rate set by Central Bank + recargo [T1]
Failure to register	Fines + back-assessment [T1]
Failure to issue comprobante	Fines + potential closure [T1]
Fraud	Criminal penalties [T1]

Step 9: Classification Matrix [T1]

Domestic Purchases

Domestic Purchases

Category	IVA Rate	Input Credit	Notes
Office supplies	10%	Yes
Commercial rent	10%	Yes
Residential rent	5%	Yes (if for business)	Tasa reducida
Electricity (commercial)	10%	Yes
Telephone/internet	10%	Yes
Motor car	10%	BLOCKED
Entertainment	10%	BLOCKED
Professional services	10%	Yes
Agricultural products (first sale)	5%	Yes
Medicines	5%	Yes	Tasa reducida
Capital goods (machinery)	5%	Yes	Tasa reducida
Insurance (general)	10%	Yes
Financial interest	5%	Yes (if for business)

Sales

Sales

Category	IVA	Return Line
Domestic sale (standard)	10%	Line 1, Line 2
Domestic sale (reduced)	5%	Line 3, Line 4
Export	0%	Line 5
Exempt	Exempt	Line 6

Step 10: Agricultural (IVA Agropecuario) Rules [T2]

• Agricultural (IVA Agropecuario) Rules — - Agricultural producers selling unprocessed products: 5% IVA [T1] - Purchasers from small unregistered producers: issue autofactura and self-assess IVA [T1] - Agricultural cooperatives: may have special treatments [T2] - Agricultural inputs: some exempt, some at 5% [T2] - Flag for reviewer: agricultural sector has numerous special provisions (Ley 125/91; Ley 6380/2019)

Step 11: Maquila Regime [T2]

• Maquila Regime — - Maquila companies: special IVA treatment on imports and exports - Inputs imported for maquila processing: may be exempt from IVA - Finished goods exported: zero-rated - Flag for reviewer: maquila benefits require CNIME authorization (Ley 1064/97 (Ley de Maquila))

Step 11a: SIFEN Electronic Invoicing [T1]

Legislation: Decreto 3585/2020; SET Resoluciones.

Paraguay is implementing SIFEN (Sistema Integrado de Facturacion Electronica):

Types of Electronic Documents (DE)

Types of Electronic Documents (DE) (Decreto 3585/2020; SET Resoluciones)

Document	Code	Use	Supports IVA Credit
Factura Electronica	FE	Standard sales	YES [T1]
Autofactura Electronica	AFE	Purchase from informal sector	YES [T1]
Nota de Credito Electronica	NCE	Returns, corrections	YES (reduces IVA) [T1]
Nota de Debito Electronica	NDE	Additional charges	YES [T1]
Nota de Remision Electronica	NRE	Transport documents	NO [T1]

SIFEN Requirements [T1]

• SIFEN Requirements — 1. Phased mandatory rollout based on taxpayer size 2. Documents authorized electronically by SET 3. Each DE has a unique CDC (Codigo de Control Digital) 4. XML format with digital signature 5. Paper timbrado still valid for non-SIFEN taxpayers (transitional) (Decreto 3585/2020; SET Resoluciones)

Timbrado (Paper Authorization) [T1]

• Timbrado (Paper Authorization) — For taxpayers not yet on SIFEN: - All invoices must have valid timbrado (authorization number from SET) - Timbrado has a validity period (fecha de inicio / fecha de vencimiento) - Expired timbrado = invalid factura = NO credito fiscal [T1] - Verify timbrado validity on SET website

Agriculture and Livestock

• Agriculture and Livestock — - Paraguay is a major agricultural exporter (soybeans, beef, grains) - First sale of unprocessed agricultural products: IVA at 5% [T1] - Processed agricultural products: IVA at 10% [T1] - Exports of agricultural products: zero-rated [T1] - Autofactura: used when purchasing from small unregistered producers [T1] - Agricultural cooperatives: IVA applies normally, but cooperative structure may affect income tax [T2]

Real Estate

• Real Estate — - First sale of new real estate: IVA at 5% [T1] - Subsequent sales: IVA at 5% [T2] - Commercial rental: IVA at 10% [T1] - Residential rental: IVA at 5% [T1] - Construction services: IVA at 10% [T1] - Land (bare): exempt [T2]

Financial Services

• Financial Services — - Interest on loans: IVA at 5% [T1] - Banking commissions and fees: IVA at 10% [T1] - Insurance premiums (life): exempt [T1] - Insurance premiums (general): IVA at 10% [T1] - Leasing (arrendamiento financiero): IVA at 5% [T1]

Telecommunications

• Telecommunications — - All telecom services: IVA at 10% [T1] - Internet services: IVA at 10% [T1] - Prepaid cards: IVA included [T1]

Digital Services [T2]

• Digital Services — - Digital services from non-residents: subject to IVA at 10% via reverse charge - Streaming, cloud computing, digital advertising: buyer self-assesses - Flag for reviewer: digital taxation rules are evolving

Step 11c: RESIMPLE Regime [T2]

• RESIMPLE Regime — - Micro and small enterprises with annual income up to PYG 80,000,000 - Simplified regime substituting IVA, IRACIS, and other obligations - RESIMPLE taxpayers do NOT charge IVA separately - Buyers CANNOT claim IVA credit on RESIMPLE purchases - Fixed periodic payments based on income bracket (Ley 6380/2019)

Step 11d: Libro de Compras y Ventas [T1]

• Libro de Compras y Ventas — All IVA taxpayers must maintain: - Libro de Compras: purchases with factura/DE details, RUC of supplier, date, base (by rate 5%/10%), IVA, total - Libro de Ventas: sales with factura/DE details, RUC of customer, date, base (by rate), IVA, total - Electronic submission via Marangatú system (HECHAUKA) - Summary totals reconcile to Formulario 120 - Retention: minimum 5 years

PROHIBITIONS [T1]

• PROHIBITIONS — - NEVER let AI guess IVA classification - NEVER allow input credit on blocked categories - NEVER allow input credit without valid fiscal document (timbrado or SIFEN) - NEVER confuse 10% standard with 5% reduced rate - NEVER apply reverse charge to out-of-scope categories - NEVER confuse zero-rated exports with exempt supplies - NEVER compute any number -- all arithmetic is handled by the deterministic engine

Step 12: Edge Case Registry

EC1 -- Agricultural first sale at 5% [T1]

Situation: Farmer sells soybeans to processor. Resolution: First sale of unprocessed agricultural product at 5%. Processor claims input IVA credit at 5%.

EC2 -- Imported software [T1]

Situation: Paraguay company subscribes to US cloud service. No IVA. Resolution: Self-assess IVA at 10%. Output and input. Net = zero.

EC3 -- Capital goods purchase at 5% [T1]

Situation: Company purchases industrial machinery. Resolution: Capital goods (machinery, equipment for production) are at reduced rate of 5%. Input IVA at 5% is fully recoverable.

EC4 -- Credit notes [T1]

Situation: Client issues nota de credito. Resolution: Reduce output IVA. Must be valid fiscal document. Report net.

EC5 -- Residential rental at 5% [T1]

Situation: Company rents apartment for employee housing. Resolution: Residential rental is at 5% IVA. Input credit available if for business purposes. If personal use, BLOCKED.

EC6 -- Financial interest received [T1]

Situation: Company earns interest on a loan made to another company. Resolution: Interest on loans is taxable at 5%. Report on Line 3/Line 4.

EC7 -- Autofactura for informal purchases [T1]

Situation: Business purchases agricultural products from unregistered farmer. Resolution: Issue autofactura. Self-assess IVA at 5%. Input credit available. Withhold and remit IVA on behalf of seller.

EC8 -- MERCOSUR import [T1]

Situation: Company imports goods from Brazil. Resolution: IVA paid at customs on CIF + duties at 10%. Input credit available. No special MERCOSUR IVA treatment -- each country applies own IVA.

Step 13: Test Suite

Test 1 -- Standard local purchase, 10%

Input: PY supplier, office supplies, gross PYG 11,000,000, IVA PYG 1,000,000, net PYG 10,000,000. Valid SIFEN document. Expected output: Line 9 = PYG 1,000,000 input IVA. Full recovery.

Test 2 -- Export, zero-rated

Input: Exporter ships soybeans to Argentina, net PYG 500,000,000. Expected output: Line 5 = PYG 500,000,000. No output IVA. Input IVA fully recoverable.

Test 3 -- Motor vehicle, blocked

Input: Purchase sedan PYG 150,000,000, IVA PYG 15,000,000. Expected output: IVA PYG 15,000,000 BLOCKED. No input credit.

Test 4 -- Agricultural sale at 5%

Input: Farmer sells cattle PYG 50,000,000 (PYG 47,619,048 + IVA PYG 2,380,952 at 5%). Expected output: Line 3 = PYG 47,619,048. Line 4 = PYG 2,380,952.

Test 5 -- Capital goods at 5%

Input: Industrial machinery PYG 100,000,000 + IVA PYG 5,000,000 (5%). Expected output: Line 10 = PYG 5,000,000 input IVA at reduced rate. Full recovery.

Test 6 -- Imported services, reverse charge

Input: US consulting, USD 5,000 (~ PYG 37,000,000). No IVA. Expected output: Self-assess output IVA = PYG 3,700,000 (10%). Input = PYG 3,700,000. Net = zero.

Test 7 -- Exempt supply (education)

Input: School earns PYG 20,000,000 from tuition. Expected output: Line 6 = PYG 20,000,000. No output IVA. Input IVA NOT recoverable.

Test 8 -- Entertainment, blocked

Input: Client dinner PYG 1,100,000 inclusive of IVA PYG 100,000. Expected output: IVA PYG 100,000 BLOCKED. No input credit.

Contribution Notes

A skill may not be published without sign-off from a licensed practitioner in the relevant jurisdiction.

Appendix A: Reviewer Escalation Protocol

When a [T2] situation is identified, output:

REVIEWER FLAG
Tier: T2
Transaction: [description]
Issue: [what is ambiguous]
Options: [list the possible treatments]
Recommended: [which treatment is most likely correct and why]
Action Required: Licensed CPA must confirm before filing.

When a [T3] situation is identified, output:

ESCALATION REQUIRED
Tier: T3
Transaction: [description]
Issue: [what is outside skill scope]
Action Required: Do not classify. Refer to licensed CPA. Document gap.

Self-Supply (Autoconsumo) [T1]

• Self-Supply (Autoconsumo) — - Withdrawal of goods for personal use: taxable event at applicable rate (10% or 5%) [T1] - Report as output IVA [T1]

Installment Sales [T1]

• Installment Sales — - IVA due at time of delivery, not at payment [T1] - Full IVA reported in the delivery period [T1]

ISC (Impuesto Selectivo al Consumo) Interaction [T1]

• ISC Interaction — - ISC applies to specific goods (fuel, alcohol, tobacco, vehicles, soft drinks) - ISC is separate from IVA - IVA base INCLUDES ISC amount [T1]

Disclaimer

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