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openaccountants/skills/paraguay-iva.md
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1---
2name: paraguay-iva
3description: Use this skill whenever asked to prepare, review, or create a Paraguay IVA (Impuesto al Valor Agregado) return for any client. Trigger on phrases like "prepare IVA return", "do the IVA", "Paraguay VAT", or any request involving Paraguay value added tax filing. ALWAYS read this skill before touching any Paraguay IVA-related work.
4---
5 
6# Paraguay IVA Return Preparation Skill
7 
8---
9 
10## Skill Metadata
11 
12| Field | Value |
13|-------|-------|
14| Jurisdiction | Paraguay |
15| Jurisdiction Code | PY |
16| Primary Legislation | Ley 125/91 (Ley de Reforma Tributaria), Libro III -- IVA (as amended by Ley 6380/2019) |
17| Supporting Legislation | Decreto 1030/2020 (Reglamento IVA); Resoluciones SET |
18| Tax Authority | Subsecretaria de Estado de Tributacion (SET) |
19| Filing Portal | https://www.set.gov.py (Marangatú System) |
20| Contributor | Open Accounting Skills Registry |
21| Validated By | Deep research verification, April 2026 |
22| Validation Date | April 2026 |
23| Skill Version | 1.0 |
24| Confidence Coverage | Tier 1: rate classification, return form, input recovery. Tier 2: partial exemption, maquila, IVA agropecuario. Tier 3: complex structures, rulings. |
25 
26---
27 
28## Confidence Tier Definitions
29 
30- **[T1] Tier 1 -- Deterministic.** Apply exactly as written.
31- **[T2] Tier 2 -- Reviewer Judgement Required.** Flag and present options.
32- **[T3] Tier 3 -- Out of Scope / Escalate.** Do not guess.
33 
34---
35 
36## Step 0: Client Onboarding Questions
37 
381. **Entity name and RUC** [T1]
392. **Tax regime** [T1] -- IRE General, IRE Simple, RESIMPLE, or IRP
403. **Filing period** [T1] -- monthly (standard)
414. **Industry/sector** [T2] -- agriculture (IVA Agropecuario), manufacturing, maquila
425. **Does the business make exempt supplies?** [T2]
436. **Does the business import goods?** [T1]
447. **Is the business under maquila regime?** [T2]
458. **Credit balance brought forward** [T1]
46 
47**If items 1-3 are unknown, STOP.**
48 
49---
50 
51## Step 1: IVA Rate Structure [T1]
52 
53**Legislation:** Ley 125/91, Article 91 (as amended by Ley 6380/2019).
54 
55### Standard Rate
56 
57| Rate | Application |
58|------|-------------|
59| 10% | Standard rate on most taxable supplies of goods and services [T1] |
60 
61### Reduced Rate
62 
63| Rate | Application |
64|------|-------------|
65| 5% | Agricultural products (unprocessed), pharmaceutical products, certain basic goods, residential rental, interest on loans, sale of real estate [T1] |
66 
67### Items at Reduced Rate (5%) [T1]
68 
69**Legislation:** Ley 125/91, Article 91.
70 
71- Unprocessed agricultural and livestock products (first sale)
72- Pharmaceutical and medicinal products
73- Capital goods (machinery, equipment for production)
74- Residential rental income
75- Interest and commissions on financial loans
76- Sale of real estate (first transfer)
77- Public passenger transportation
78 
79### Exempt Supplies [T1]
80 
81**Legislation:** Ley 125/91, Article 83.
82 
83**Exempt goods:**
84- Fresh fruits and vegetables (in their natural state, sold by producer)
85- Live animals (sold by producer)
86- Basic food products: bread, yerba mate, fresh milk, eggs (specific list)
87- Fuel and petroleum derivatives (subject to specific tax -- ISC)
88- Books, newspapers, educational materials
89- Agricultural inputs (certain seeds, fertilizers)
90 
91**Exempt services:**
92- Educational services (authorized institutions)
93- Health/medical services (public institutions, hospitals)
94- Financial intermediation (deposits, certain banking services)
95- Residential rental (up to certain value -- but NOTE: rental above threshold is at 5%) [T2]
96- Public services (water, electricity -- domestic consumption below threshold)
97 
98---
99 
100## Step 2: Transaction Classification Rules
101 
102### 2a. Determine Transaction Type [T1]
103- Sale (IVA debito -- output) or Purchase (IVA credito -- input)
104- Salaries, IPS (social security), dividends, loans = OUT OF SCOPE
105 
106### 2b. Determine Counterparty Location [T1]
107- Domestic (Paraguay)
108- MERCOSUR: Argentina, Brazil, Uruguay
109- International
110 
111### 2c. Determine IVA Rate [T1]
112- 0% (export), 5% (reduced), 10% (standard), or exempt
113 
114---
115 
116## Step 3: IVA Return Form Structure (Formulario 120) [T1]
117 
118**Filed monthly via Marangatú system.**
119 
120### IVA Debito (Output)
121 
122| Line | Description |
123|------|-------------|
124| 1 | Ventas gravadas al 10% |
125| 2 | IVA debito al 10% |
126| 3 | Ventas gravadas al 5% |
127| 4 | IVA debito al 5% |
128| 5 | Exportaciones (0%) |
129| 6 | Ventas exentas |
130| 7 | Total ventas |
131| 8 | Total IVA debito (Line 2 + Line 4) |
132 
133### IVA Credito (Input)
134 
135| Line | Description |
136|------|-------------|
137| 9 | IVA en compras al 10% |
138| 10 | IVA en compras al 5% |
139| 11 | IVA en importaciones |
140| 12 | Total IVA credito |
141| 13 | Ajustes |
142| 14 | IVA credito neto |
143 
144### Liquidacion
145 
146| Line | Description |
147|------|-------------|
148| 15 | IVA a pagar (Line 8 - Line 14) |
149| 16 | Saldo a favor anterior |
150| 17 | Retenciones |
151| 18 | Total a pagar / saldo a favor |
152 
153---
154 
155## Step 4: IVA Withholding [T1]
156 
157**Legislation:** Resoluciones SET.
158 
159### Withholding Agents [T1]
160 
161| Agent Type | Rate |
162|------------|------|
163| Government entities | 30% of IVA invoiced [T1] |
164| Designated large taxpayers | 30% of IVA [T1] |
165| Exporters | 30% of IVA on local purchases [T1] |
166| Purchasers from occasional taxpayers | 100% of IVA [T1] |
167 
168---
169 
170## Step 5: Reverse Charge on Imported Services [T1]
171 
172**Legislation:** Ley 125/91, Article 82.
173 
174When a Paraguay registered person receives services from a non-resident:
175 
1761. Self-assess IVA at applicable rate (10% or 5%) [T1]
1772. Report as output IVA [T1]
1783. Claim as input if for taxable operations [T1]
1794. Net = zero for fully taxable businesses [T1]
180 
181---
182 
183## Step 6: Deductibility Check
184 
185### Blocked Input IVA (No Recovery) [T1]
186 
187**Legislation:** Ley 125/91, Article 86.
188 
189- **Motor vehicles** -- passenger vehicles (exception: rental, taxi, transport) [T1]
190- **Entertainment** -- meals, recreation (unless hospitality) [T1]
191- **Personal use** [T1]
192- **Exempt operations** -- costs attributable to exempt supplies [T1]
193- **Purchases without valid comprobante (factura, boleta, autofactura)** [T1]
194 
195### Invoice Requirement [T1]
196- Paraguay has implemented SIFEN (Sistema Integrado de Facturacion Electronica)
197- Electronic documents (DE -- Documento Electronico) required for most taxpayers
198- Valid timbrado (authorization) required for paper invoices (being phased out)
199- Input IVA only deductible with valid fiscal document
200 
201### Partial Exemption [T2]
202- Direct attribution + proportional for common costs
203- `Recovery % = (Taxable Sales / Total Sales) * 100`
204- Flag for reviewer
205 
206---
207 
208## Step 7: Key Thresholds [T1]
209 
210| Threshold | Value |
211|-----------|-------|
212| Mandatory IVA registration | All IRE taxpayers (companies, sole proprietors above threshold) |
213| RESIMPLE | Micro and small enterprises with income up to PYG 80,000,000/year -- simplified regime [T2] |
214| Electronic invoicing (SIFEN) | Mandatory phased rollout |
215 
216---
217 
218## Step 8: Filing Deadlines and Penalties [T1]
219 
220**Legislation:** Ley 125/91; Ley 6380/2019; Codigo Tributario.
221 
222### Filing Deadlines [T1]
223 
224Filing date depends on the last digit of the RUC:
225 
226| Last Digit of RUC | Due Date (of following month) |
227|-------------------|-------------------------------|
228| 0 | 7th |
229| 1 | 9th |
230| 2 | 11th |
231| 3 | 13th |
232| 4 | 15th |
233| 5 | 17th |
234| 6 | 19th |
235| 7 | 21st |
236| 8 | 23rd |
237| 9 | 25th |
238 
239### Penalties
240 
241| Violation | Penalty |
242|-----------|---------|
243| Late filing | Multa (fine) per SET resolution [T1] |
244| Late payment | Interest at rate set by Central Bank + recargo [T1] |
245| Failure to register | Fines + back-assessment [T1] |
246| Failure to issue comprobante | Fines + potential closure [T1] |
247| Fraud | Criminal penalties [T1] |
248 
249---
250 
251## Step 9: Classification Matrix [T1]
252 
253### Domestic Purchases
254 
255| Category | IVA Rate | Input Credit | Notes |
256|----------|---------|--------------|-------|
257| Office supplies | 10% | Yes | |
258| Commercial rent | 10% | Yes | |
259| Residential rent | 5% | Yes (if for business) | Tasa reducida |
260| Electricity (commercial) | 10% | Yes | |
261| Telephone/internet | 10% | Yes | |
262| Motor car | 10% | BLOCKED | |
263| Entertainment | 10% | BLOCKED | |
264| Professional services | 10% | Yes | |
265| Agricultural products (first sale) | 5% | Yes | |
266| Medicines | 5% | Yes | Tasa reducida |
267| Capital goods (machinery) | 5% | Yes | Tasa reducida |
268| Insurance (general) | 10% | Yes | |
269| Financial interest | 5% | Yes (if for business) | |
270 
271### Sales
272 
273| Category | IVA | Return Line |
274|----------|-----|-------------|
275| Domestic sale (standard) | 10% | Line 1, Line 2 |
276| Domestic sale (reduced) | 5% | Line 3, Line 4 |
277| Export | 0% | Line 5 |
278| Exempt | Exempt | Line 6 |
279 
280---
281 
282## Step 10: Agricultural (IVA Agropecuario) Rules [T2]
283 
284**Legislation:** Ley 125/91; Ley 6380/2019.
285 
286- Agricultural producers selling unprocessed products: 5% IVA [T1]
287- Purchasers from small unregistered producers: issue autofactura and self-assess IVA [T1]
288- Agricultural cooperatives: may have special treatments [T2]
289- Agricultural inputs: some exempt, some at 5% [T2]
290- Flag for reviewer: agricultural sector has numerous special provisions
291 
292---
293 
294## Step 11: Maquila Regime [T2]
295 
296**Legislation:** Ley 1064/97 (Ley de Maquila).
297 
298- Maquila companies: special IVA treatment on imports and exports
299- Inputs imported for maquila processing: may be exempt from IVA
300- Finished goods exported: zero-rated
301- Flag for reviewer: maquila benefits require CNIME authorization
302 
303---
304 
305## Step 11a: SIFEN Electronic Invoicing [T1]
306 
307**Legislation:** Decreto 3585/2020; SET Resoluciones.
308 
309Paraguay is implementing SIFEN (Sistema Integrado de Facturacion Electronica):
310 
311### Types of Electronic Documents (DE)
312 
313| Document | Code | Use | Supports IVA Credit |
314|----------|------|-----|-------------------|
315| Factura Electronica | FE | Standard sales | YES [T1] |
316| Autofactura Electronica | AFE | Purchase from informal sector | YES [T1] |
317| Nota de Credito Electronica | NCE | Returns, corrections | YES (reduces IVA) [T1] |
318| Nota de Debito Electronica | NDE | Additional charges | YES [T1] |
319| Nota de Remision Electronica | NRE | Transport documents | NO [T1] |
320 
321### SIFEN Requirements [T1]
322 
3231. Phased mandatory rollout based on taxpayer size
3242. Documents authorized electronically by SET
3253. Each DE has a unique CDC (Codigo de Control Digital)
3264. XML format with digital signature
3275. Paper timbrado still valid for non-SIFEN taxpayers (transitional)
328 
329### Timbrado (Paper Authorization) [T1]
330 
331For taxpayers not yet on SIFEN:
332- All invoices must have valid timbrado (authorization number from SET)
333- Timbrado has a validity period (fecha de inicio / fecha de vencimiento)
334- Expired timbrado = invalid factura = NO credito fiscal [T1]
335- Verify timbrado validity on SET website
336 
337---
338 
339## Step 11b: Sector-Specific Rules [T2]
340 
341### Agriculture and Livestock
342 
343- Paraguay is a major agricultural exporter (soybeans, beef, grains)
344- First sale of unprocessed agricultural products: IVA at 5% [T1]
345- Processed agricultural products: IVA at 10% [T1]
346- Exports of agricultural products: zero-rated [T1]
347- Autofactura: used when purchasing from small unregistered producers [T1]
348- Agricultural cooperatives: IVA applies normally, but cooperative structure may affect income tax [T2]
349 
350### Real Estate
351 
352- First sale of new real estate: IVA at 5% [T1]
353- Subsequent sales: IVA at 5% [T2]
354- Commercial rental: IVA at 10% [T1]
355- Residential rental: IVA at 5% [T1]
356- Construction services: IVA at 10% [T1]
357- Land (bare): exempt [T2]
358 
359### Financial Services
360 
361- Interest on loans: IVA at 5% [T1]
362- Banking commissions and fees: IVA at 10% [T1]
363- Insurance premiums (life): exempt [T1]
364- Insurance premiums (general): IVA at 10% [T1]
365- Leasing (arrendamiento financiero): IVA at 5% [T1]
366 
367### Telecommunications
368 
369- All telecom services: IVA at 10% [T1]
370- Internet services: IVA at 10% [T1]
371- Prepaid cards: IVA included [T1]
372 
373### Digital Services [T2]
374 
375- Digital services from non-residents: subject to IVA at 10% via reverse charge
376- Streaming, cloud computing, digital advertising: buyer self-assesses
377- Flag for reviewer: digital taxation rules are evolving
378 
379---
380 
381## Step 11c: RESIMPLE Regime [T2]
382 
383**Legislation:** Ley 6380/2019.
384 
385- Micro and small enterprises with annual income up to PYG 80,000,000
386- Simplified regime substituting IVA, IRACIS, and other obligations
387- RESIMPLE taxpayers do NOT charge IVA separately
388- Buyers CANNOT claim IVA credit on RESIMPLE purchases
389- Fixed periodic payments based on income bracket
390 
391---
392 
393## Step 11d: Libro de Compras y Ventas [T1]
394 
395All IVA taxpayers must maintain:
396 
397- **Libro de Compras**: purchases with factura/DE details, RUC of supplier, date, base (by rate 5%/10%), IVA, total
398- **Libro de Ventas**: sales with factura/DE details, RUC of customer, date, base (by rate), IVA, total
399- Electronic submission via Marangatú system (HECHAUKA)
400- Summary totals reconcile to Formulario 120
401- Retention: minimum 5 years
402 
403---
404 
405## PROHIBITIONS [T1]
406 
407- NEVER let AI guess IVA classification
408- NEVER allow input credit on blocked categories
409- NEVER allow input credit without valid fiscal document (timbrado or SIFEN)
410- NEVER confuse 10% standard with 5% reduced rate
411- NEVER apply reverse charge to out-of-scope categories
412- NEVER confuse zero-rated exports with exempt supplies
413- NEVER compute any number -- all arithmetic is handled by the deterministic engine
414 
415---
416 
417## Step 12: Edge Case Registry
418 
419### EC1 -- Agricultural first sale at 5% [T1]
420**Situation:** Farmer sells soybeans to processor.
421**Resolution:** First sale of unprocessed agricultural product at 5%. Processor claims input IVA credit at 5%.
422 
423### EC2 -- Imported software [T1]
424**Situation:** Paraguay company subscribes to US cloud service. No IVA.
425**Resolution:** Self-assess IVA at 10%. Output and input. Net = zero.
426 
427### EC3 -- Capital goods purchase at 5% [T1]
428**Situation:** Company purchases industrial machinery.
429**Resolution:** Capital goods (machinery, equipment for production) are at reduced rate of 5%. Input IVA at 5% is fully recoverable.
430 
431### EC4 -- Credit notes [T1]
432**Situation:** Client issues nota de credito.
433**Resolution:** Reduce output IVA. Must be valid fiscal document. Report net.
434 
435### EC5 -- Residential rental at 5% [T1]
436**Situation:** Company rents apartment for employee housing.
437**Resolution:** Residential rental is at 5% IVA. Input credit available if for business purposes. If personal use, BLOCKED.
438 
439### EC6 -- Financial interest received [T1]
440**Situation:** Company earns interest on a loan made to another company.
441**Resolution:** Interest on loans is taxable at 5%. Report on Line 3/Line 4.
442 
443### EC7 -- Autofactura for informal purchases [T1]
444**Situation:** Business purchases agricultural products from unregistered farmer.
445**Resolution:** Issue autofactura. Self-assess IVA at 5%. Input credit available. Withhold and remit IVA on behalf of seller.
446 
447### EC8 -- MERCOSUR import [T1]
448**Situation:** Company imports goods from Brazil.
449**Resolution:** IVA paid at customs on CIF + duties at 10%. Input credit available. No special MERCOSUR IVA treatment -- each country applies own IVA.
450 
451---
452 
453## Step 13: Test Suite
454 
455### Test 1 -- Standard local purchase, 10%
456**Input:** PY supplier, office supplies, gross PYG 11,000,000, IVA PYG 1,000,000, net PYG 10,000,000. Valid SIFEN document.
457**Expected output:** Line 9 = PYG 1,000,000 input IVA. Full recovery.
458 
459### Test 2 -- Export, zero-rated
460**Input:** Exporter ships soybeans to Argentina, net PYG 500,000,000.
461**Expected output:** Line 5 = PYG 500,000,000. No output IVA. Input IVA fully recoverable.
462 
463### Test 3 -- Motor vehicle, blocked
464**Input:** Purchase sedan PYG 150,000,000, IVA PYG 15,000,000.
465**Expected output:** IVA PYG 15,000,000 BLOCKED. No input credit.
466 
467### Test 4 -- Agricultural sale at 5%
468**Input:** Farmer sells cattle PYG 50,000,000 (PYG 47,619,048 + IVA PYG 2,380,952 at 5%).
469**Expected output:** Line 3 = PYG 47,619,048. Line 4 = PYG 2,380,952.
470 
471### Test 5 -- Capital goods at 5%
472**Input:** Industrial machinery PYG 100,000,000 + IVA PYG 5,000,000 (5%).
473**Expected output:** Line 10 = PYG 5,000,000 input IVA at reduced rate. Full recovery.
474 
475### Test 6 -- Imported services, reverse charge
476**Input:** US consulting, USD 5,000 (~ PYG 37,000,000). No IVA.
477**Expected output:** Self-assess output IVA = PYG 3,700,000 (10%). Input = PYG 3,700,000. Net = zero.
478 
479### Test 7 -- Exempt supply (education)
480**Input:** School earns PYG 20,000,000 from tuition.
481**Expected output:** Line 6 = PYG 20,000,000. No output IVA. Input IVA NOT recoverable.
482 
483### Test 8 -- Entertainment, blocked
484**Input:** Client dinner PYG 1,100,000 inclusive of IVA PYG 100,000.
485**Expected output:** IVA PYG 100,000 BLOCKED. No input credit.
486 
487---
488 
489## Contribution Notes
490 
491**A skill may not be published without sign-off from a licensed practitioner in the relevant jurisdiction.**
492 
493---
494 
495## Appendix A: Reviewer Escalation Protocol
496 
497When a [T2] situation is identified, output:
498 
499```
500REVIEWER FLAG
501Tier: T2
502Transaction: [description]
503Issue: [what is ambiguous]
504Options: [list the possible treatments]
505Recommended: [which treatment is most likely correct and why]
506Action Required: Licensed CPA must confirm before filing.
507```
508 
509When a [T3] situation is identified, output:
510 
511```
512ESCALATION REQUIRED
513Tier: T3
514Transaction: [description]
515Issue: [what is outside skill scope]
516Action Required: Do not classify. Refer to licensed CPA. Document gap.
517```
518 
519---
520 
521## Appendix B: Additional Rules [T1]
522 
523### Self-Supply (Autoconsumo) [T1]
524 
525- Withdrawal of goods for personal use: taxable event at applicable rate (10% or 5%) [T1]
526- Report as output IVA [T1]
527 
528### Installment Sales [T1]
529 
530- IVA due at time of delivery, not at payment [T1]
531- Full IVA reported in the delivery period [T1]
532 
533### ISC (Impuesto Selectivo al Consumo) Interaction [T1]
534 
535- ISC applies to specific goods (fuel, alcohol, tobacco, vehicles, soft drinks)
536- ISC is separate from IVA
537- IVA base INCLUDES ISC amount [T1]
538 
539 
540---
541 
542## Disclaimer
543 
544This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
545 
546The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.
547 

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About

Use this skill whenever asked to prepare, review, or create a Paraguay IVA (Impuesto al Valor Agregado) return for any client. Trigger on phrases like "prepare IVA return", "do the IVA", "Paraguay VAT", or any request involving Paraguay value added tax filing. ALWAYS read this skill before touching any Paraguay IVA-related work.

PYty-2025

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