Paraguay IVA Guide 2026

Paraguay IVA at a glance

Do I need to comply? — 60-second check

Your first taxable supply in Paraguay is the trigger. From commencement of activity, Régimen General taxpayers are in scope — Paraguay has no general turnover threshold for IVA. The 10% standard rate (one of the lowest globally under Ley 6380/2019) applies to most supplies, with 5% reduced rate for canasta básica, certain agricultural inputs, residential leases, and listed sectoral categories.

Four questions, in order:

• Paraguayan-resident business? All taxable activity is in scope from commencement. The structural choice is between Régimen General (standard), IRE Simple (mid-sized taxpayers under specific turnover thresholds), and IRE Resimple (smallest taxpayers, simplified flat-rate framework). Local Paraguayan Business track.
• Overseas business supplying digital services to Paraguayan consumers? Foreign SaaS / Digital Services Seller track. The platform-tax / intermediary-withholding model under Ley 6380/2019 and Resolución General 76/2020 (effective January 2021) operates primarily through credit-card and payment-processor withholding.
• Overseas business shipping physical goods to Paraguayan consumers — your own store, regional marketplaces? Foreign E-commerce Seller track. Import IVA at 10% applies at customs (Dirección Nacional de Aduanas, DNA) alongside Customs Duty (GA) and ISC (Impuesto Selectivo al Consumo) on listed categories.
• Overseas business importing goods into Paraguay for distribution, manufacturing, or onward sale? Foreign Importer track. Import IVA at 10% applies at customs on customs value + GA + applicable charges. The Mercosur CET framework, Paraguay’s Régimen de Maquila (Ley 1064/97), and Paraguay’s Zonas Francas regime provide structural preferential treatment under specific conditions.

Two contextual points. First: Paraguay’s 10% standard IVA — combined with the Régimen de Maquila and competitive corporate income tax — makes the country a structurally attractive Mercosur production base. The Maquila regime allows export-oriented operations to assemble or transform inputs with materially preferential indirect-tax treatment under qualifying conditions. Second: Paraguay’s currency, the Guaraní, has the largest USD-to-LCY ratio among major LatAm economies (≈7,400 PYG per USD); pricing presentation typically uses millions of Guaraníes for B2B contracts.

Quick-jump to your persona

• Foreign SaaS / Digital Services Seller into Paraguay
• Foreign E-commerce Seller into Paraguay
• Foreign Importer / Physical Goods Seller
• Local Paraguayan Business

Foreign SaaS / Digital Services Seller into Paraguay

Sell SaaS or digital services into Paraguay from outside? You’re operating under Ley 6380/2019 and Resolución General 76/2020 — the cross-border digital services framework effective 1 January 2021. The 10% IVA applies to B2C digital services to Paraguayan consumers; in most cases collection runs through credit-card intermediaries and payment processors withholding at the transaction level rather than direct vendor registration with SET. The B2B portion to RUC-registered Paraguayan businesses operates under self-assessment mechanisms.

Are your Paraguayan sales actually in Paraguay’s tax base?

Place of supply for cross-border digital services follows the recipient’s location. Resolución General 76/2020 and SET guidance set out indicators: customer billing address in Paraguay, payment instrument issued by a Paraguayan institution, IP address resolving to Paraguay, and other commercially relevant location data.

Take Magyar Bortermelő Zrt., a Hungarian winemaker with EUR 18 million revenue globally. Magyar Bortermelő operates a B2B wine-allocation platform that supplies premium Tokaji and Eger wines to fine-dining importers across South America. Annual Paraguayan B2B revenue reached USD 65,000 in 2025 through three Asunción restaurant-import accounts. Magyar Bortermelő’s platform supplies are technically digital services (the allocation and inventory-management software layer), with the physical wines following separately on commercial invoice. Magyar Bortermelő’s Paraguayan B2B customers (RUC-registered) self-assess IVA on the platform services under reverse-charge mechanisms; the wines themselves are subject to import IVA at the DNA on physical entry. Magyar Bortermelő engaged a Paraguayan tax advisor to confirm the analysis and document the structure.

When the SET clock starts running

Three operational triggers under the post-2021 framework.

The platform-tax trigger applies on cross-border digital service supplies to Paraguayan B2C consumers — collected at the transaction level by credit-card and payment-processor intermediaries.

The B2B reverse-charge trigger applies for imported services to RUC-registered Paraguayan businesses, where the Paraguayan customer self-assesses on its monthly Formulario 120.

The permanent-establishment trigger applies when an overseas company creates a Paraguayan presence — fixed place of business, dependent agent concluding contracts, or local sales infrastructure may create taxable presence under Paraguayan and applicable tax-treaty rules.

Operating model — withholding vs registration

In most cases, foreign digital services sellers into Paraguay operate under the intermediary-withholding model — credit-card and payment-processor intermediaries withhold 10% IVA on cross-border subscriptions at the transaction level and remit to SET under the platform-tax framework. The foreign vendor’s operational burden is limited to: ensuring pricing accommodates the 10% withholding; documenting that the platform-tax model applies (avoids double-charging); maintaining records for any audit.

For very large B2C operations or where the platform-tax model does not capture the flow (e.g. specific routing not via Paraguayan intermediaries), SET may require direct registration. Verify the operating model with a Paraguayan tax advisor before scaling.

What you charge, and on what

10% IVA on B2C cross-border digital services to Paraguayan consumers. In the platform-tax model, this is collected by the intermediary, not invoiced by the foreign vendor. For B2B supplies to RUC-registered businesses, the reverse-charge mechanism applies.

What this actually costs

• Paraguayan tax advisor retainer: USD 2,500–8,500 per year.
• Documentation maintenance for intermediary-withholding compliance: USD 1,200–3,500 per year.
• Annual reasonableness review by Contador Público: USD 1,800–5,500.
• Direct registration setup (if required): USD 5,000–15,000 initial + USD 10,000–28,000 annual.

What we see foreign SaaS sellers get wrong

Three patterns recur.

The first: assuming direct registration is required when the platform-tax model captures the transactions — adds operational overhead without compliance benefit.

The second: ignoring the B2B reverse-charge analysis — RUC verification on customer base matters.

The third: misreading currency translation — Guaraní rates against USD/EUR move materially; invoice and reverse-charge calculations should use the BCP (Banco Central del Paraguay) reference rate at the date of supply.

Foreign E-commerce Seller into Paraguay

Ship physical goods into Paraguay from outside? You’re operating in the import-IVA channel. 10% IVA applies at the DNA on customs value + GA + ISC on listed categories. The selling structure — your own platform, regional marketplaces (Mercado Libre Paraguay, regional shipper integrations), or direct-to-consumer — determines the IVA mechanics, not the rate. Paraguay’s landlocked geography shapes practical fulfilment models — most flows route via Argentina or Brazil corridors.

Are you actually ‘selling into Paraguay’?

Three structural models exist for selling physical goods to Paraguayan consumers from outside the country. First: classic cross-border drop-ship — you ship from a foreign warehouse, the Paraguayan buyer is importer of record, 10% import IVA applies at DNA on customs value + GA + ISC. Second: local stock model — you import goods in your own name into Paraguay, become the registered importer, charge Paraguayan 10% IVA on local sales, recover import IVA as credit. Third: marketplace-mediated — regional marketplaces operate under their own platform-tax assumptions; verify with the marketplace’s commercial team.

Where IVA actually bites

Import IVA at the border is the primary entry point. The customs value (CIF basis), plus GA at the applicable Mercosur CET tariff line, plus ISC on listed categories (alcoholic beverages, tobacco, certain motor vehicles, fuel), forms the base for the 10% import IVA.

Customs valuation and the DNA process

Paraguay’s DNA applies WTO valuation rules. Pricing must reflect arm’s-length terms; significant discounts on the declared value invite audit. Paraguay is a full Mercosur member alongside Brazil, Argentina, and Uruguay — preferential rates apply to qualifying Mercosur-origin goods. Paraguay also operates extensive bilateral arrangements with neighbouring economies and benefits from preferences under selected ALADI frameworks.

Régimen de Maquila — operational considerations

Ley 1064/97 establishes Paraguay’s Maquila regime — export-oriented manufacturing operations under specific qualifying conditions benefit from materially preferential indirect-tax treatment, customs treatment, and limited income-tax exposure. Setup requires structural commitment: qualifying activity (manufacturing for export, with limited domestic sales allowance), CNIME (Consejo Nacional de Industrias Maquiladoras de Exportación) approval, employment commitments, and ongoing compliance. The regime is structurally powerful — many regional brands assemble apparel, electronics, and packaged goods under Maquila.

Zonas Francas alternative

Paraguay also operates Zonas Francas (Ciudad del Este Zona Franca Internacional, Global del Paraguay Zona Franca) — within-zone activity benefits from specific IVA, GA, and ISC treatment under qualifying conditions. The zones are useful for distribution hubs serving the Paraguayan domestic market and select re-export flows.

What this actually costs

• Customs broker (Despachante de Aduana) per shipment: USD 200–800.
• Customs duty (GA): 0–35% by tariff line under Mercosur CET.
• ISC on listed categories: variable rates by product (alcoholic beverages, tobacco, fuel, vehicles).
• Import IVA: 10% on customs value + GA + ISC.
• Local fulfilment partner setup: USD 8,000–28,000.
• Maquila setup (if used): USD 30,000–120,000 initial + USD 20,000–60,000 annual operating.

What we see foreign e-commerce sellers get wrong

Three patterns recur.

The first: under-using Mercosur origin preferences — origin documentation reduces GA materially on qualifying intra-bloc flows.

The second: ignoring ISC on listed categories — alcohol, tobacco, fuel, and certain vehicles attract additional layers beyond IVA + GA.

The third: misreading landlocked logistics — Paraguay’s import flows route via Argentina or Brazil corridors; container schedules and overland routes materially affect lead times and customs interface.

Foreign Importer / Physical Goods Seller into Paraguay

Importing into Paraguay for distribution, manufacturing, or onward sale? You’re in a B2B-physical channel that overlaps significantly with the e-commerce track on import mechanics, but the structural questions differ — registered Paraguayan entity vs cross-border supply, Maquila or Zonas Francas optionality, and integration with Mercosur preferences.

The structural choice

Three models predominate. First: register a Paraguayan entity as importer of record — Sociedad Anónima (SA) or Sociedad de Responsabilidad Limitada (SRL), obtain RUC, import in own name, recover import IVA as credit against domestic IVA on onward sales. Second: cross-border supply with Paraguayan buyer as importer of record — your invoices remain foreign, the Paraguayan buyer assumes import IVA at DNA. Third: Régimen de Maquila under Ley 1064/97 — strongest structural benefits for export-oriented manufacturing under CNIME approval.

Mercosur framework

Paraguay is a full Mercosur member. Origin certificates under Mercosur frameworks (Decisions 6/94, 16/97, 1/04, and successive) reduce GA materially on qualifying intra-bloc trade with Brazil, Argentina, and Uruguay. Documentation discipline matters — DNA audits origin claims and reassessment exposure is real.

Maquila regime — operational deep-dive

Ley 1064/97 governs Paraguay’s Maquila regime — export-oriented manufacturing or transformation operations under CNIME (Consejo Nacional de Industrias Maquiladoras de Exportación) approval. Qualifying activities include manufacturing, assembly, transformation, repair, and certain services for export. Within-Maquila operations benefit from: 1% Tributo Único Maquila on value added (in lieu of standard income tax on Maquila-derived income); IVA suspension on Maquila inputs; preferential customs treatment. The regime requires structural commitment but represents one of LatAm’s most competitive export-manufacturing platforms.

What this actually costs

• Paraguayan SA / SRL setup: USD 4,000–12,000.
• RUC registration and SIFEN configuration: USD 1,500–4,500.
• Customs broker retainer: USD 3,000–12,000 per year.
• Monthly IVA compliance: USD 1,000–3,500 per month.
• Maquila setup (if used): USD 30,000–120,000 initial + USD 20,000–60,000 annual operating; CNIME approval process 6–12 months.

What we see foreign importers get wrong

Three patterns recur.

The first: under-using Mercosur preferences — origin documentation materially reduces duty on qualifying intra-bloc flows.

The second: misjudging Maquila vs standard import economics — Maquila is structurally powerful for export-oriented operations but represents real overhead for purely domestic-distribution structures.

The third: underestimating the CNIME approval timeline — Maquila setup is a 6–12 month process; budget accordingly.

Local Paraguayan Business

Paraguayan resident business? All taxable activity is in scope from commencement under the Régimen General. The IRE Simple regime applies to mid-sized taxpayers under specific turnover thresholds; the IRE Resimple regime applies to the smallest taxpayers under simplified flat-rate framework. For most commercial-scale operations the Régimen General applies, with monthly IVA (Formulario 120) and SIFEN e-invoicing where in scope.

Choosing the right regime

IRE Resimple applies to small taxpayers meeting specific turnover and activity-type thresholds — simplified flat-rate framework, no IVA mechanics. IRE Simple applies to mid-sized taxpayers — modified income-tax base with IVA. Régimen General applies to all other taxpayers — monthly IVA, IRE annual return, and SIFEN compliance once the taxpayer’s group is in mandatory scope.

Monthly compliance rhythm

Régimen General taxpayers submit Formulario 120 (IVA) monthly through the Sistema Marangatu. Filing deadline is based on RUC last digit (SET-published schedule). Late filing triggers jornal-mínimo-denominated fines; late payment triggers interest at SET-published rate plus penalty surcharge.

SIFEN electronic invoicing

Paraguay’s Sistema Integrado de Facturación Electrónica Nacional has been progressively rolling out since 2017. Taxpayer groups have been brought into mandatory scope through successive SET Resolutions — large taxpayers are now in mandatory scope, with mid-sized groups transitioning. Current rollout status for your taxpayer group should be verified.

Annual IRE return

Corporate income tax (Impuesto a la Renta Empresarial) at 10% on net profit — one of the lowest standard rates globally, alongside the 10% IVA reflecting Paraguay’s competitive tax positioning. Annual return filed by SET-published deadline following fiscal year-end.

What we see Paraguayan businesses get wrong

Three patterns recur.

The first: not exiting IRE Resimple at the right time — once turnover or other thresholds are exceeded, continued operation under Resimple creates retrospective exposure.

The second: misreading the SIFEN rollout timeline — taxpayers brought into mandatory scope must transition within the prescribed window.

The third: under-investing in 5% reduced-rate documentation — canasta básica, agricultural inputs, and certain residential supplies attract 5%; getting the rate wrong on these supplies creates exposure.

Cross-track essentials

Penalty exposure table

Paraguay’s penalty framework under Ley 125/91 (Código Tributario) calculates fines in jornal mínimo units or as percentages of underpaid tax. Common categories:

• Late filing — typically 1–5 jornales mínimos per omitted return depending on category.
• Late payment — interest at SET-published rate plus surcharge percentage.
• Material under-reporting (omisión) — typically 50–100% of underpaid IVA.
• Fraudulent under-reporting (defraudación) — criminal prosecution with imprisonment exposure for material amounts.
• Failure to issue compliant invoice — specific jornal-denominated fine per occurrence.

Audit triggers

SET deploys risk-based selection. Common triggers: IVA credit positions persisting over several periods, customs-import value variances vs declared resale price, sector-benchmark variance on margins, large transactions with non-resident affiliates, mismatch between IVA and IRE bases, repeated late filing, Maquila qualifying-activity disputes.

Records retention

Paraguay requires 5 years of records from the date of the relevant filing. Records must be available to SET on request. Electronic format under SIFEN counts as primary record once the taxpayer is in operational scope.

Currency and translation

The Guaraní is freely convertible under Paraguay’s managed-float framework. Pricing in foreign currency for B2B contracts is common; invoices must show Guaraní equivalent for IVA calculations. Currency translation rules under SET guidance use the BCP (Banco Central del Paraguay) reference rate at the date of transaction.

Frequently Asked Questions

Is Paraguay’s 10% IVA really one of the lowest standard rates globally?

Yes — alongside Switzerland’s standard rate (8.1%) and a handful of others, Paraguay’s 10% standard IVA is one of the lowest globally. Combined with 10% corporate income tax (IRE) and the Maquila regime, the country positions structurally as a low-tax Mercosur operating base.

What is the Maquila regime and is it right for me?

Paraguay’s Maquila regime under Ley 1064/97 — administered through CNIME — offers materially preferential indirect-tax, customs, and income-tax treatment for export-oriented manufacturing under qualifying conditions. The regime is structurally powerful for export operations but requires real operational commitment and a 6–12 month CNIME approval process. Analyse landed economics before committing.

Do I need to register directly with SET if I sell SaaS from outside?

In most cases, no — the platform-tax / intermediary-withholding model under Resolución General 76/2020 captures the transactions at the credit-card and payment-processor level. Verify your operating model with a Paraguayan tax advisor; direct registration may be required in specific scenarios.

How does SIFEN work?

Sistema Integrado de Facturación Electrónica Nacional — Paraguay’s e-invoicing framework. Progressive rollout since 2017 with large taxpayers in mandatory scope. SIFEN-compliant invoices issued through SET-approved channels. Verify your taxpayer group’s current scope status.

What’s the IRE corporate income tax rate?

10% on net profit under the Régimen General. IRE Simple and IRE Resimple operate modified or flat-rate frameworks for smaller taxpayers. Annual return filed by SET-published deadline.

How does the 5% reduced rate work?

5% applies to canasta básica (basic foodstuffs), certain agricultural inputs, residential property leases, books and educational publications, and certain pharmaceutical products. Sectoral specifics matter — verify rate per supply.

What records must I keep and for how long?

5 years from the date of the relevant tax filing. Records must be available to SET on request. Electronic format under SIFEN counts as primary record once in operational scope.

Where do I check current SET guidance?

SET’s portal at set.gov.py — Resoluciones Generales section publishes current administrative guidance. Engage a Paraguayan Contador Público for material decisions.

Recent and upcoming changes

Paraguay’s IVA framework has been operationally stable since the major 2019 modernisation under Ley 6380/2019, which restructured the tax system. The structural themes since 2019 have been: foreign digital services framework (Resolución General 76/2020, effective January 2021); SIFEN progressive rollout; continued enforcement of Maquila regime compliance.

2025 — Continued SIFEN expansion

SET continued bringing taxpayer groups into mandatory SIFEN scope through successive Resoluciones Generales. Sectoral and turnover-based criteria determine operational deadlines.

2024 — Maquila and Zonas Francas operational refinements

CNIME and SET published further guidance on Maquila qualifying activities and Zonas Francas operational parameters.

Ongoing — Mercosur framework

Paraguay continues as a full Mercosur member. Origin and trade-preference framework remains operationally stable; documentation discipline at the customs interface is the practical compliance theme.

Primary sources & further reading

• Subsecretaría de Estado de Tributación (SET) — primary tax authority portal; Resoluciones Generales, Sistema Marangatu, SIFEN guidance
• Dirección Nacional de Aduanas (DNA) — customs authority; tariff lookup, import procedures, origin certification
• CNIME — Consejo Nacional de Industrias Maquiladoras de Exportación — Maquila regulator; qualifying activity, application process, ongoing compliance
• Ley 6380/2019 — Modernización y Simplificación del Sistema Tributario Nacional
• Ley 125/91 — Código Tributario (procedural framework, penalties)
• Ley 1064/97 — Régimen de Maquila
• Decreto Reglamentario 3107/2019 — IVA regulations
• Resolución General 76/2020 — foreign digital services framework
• Mercosur Secretariat — Mercosur trade and origin framework

Disclaimer

This guide is published by TaxDo as part of the Global Tax Hub. It is general commentary on Paraguayan indirect tax (IVA, ISC) at the date shown and is not legal, tax, or accounting advice for any specific transaction or business. Paraguay’s IVA framework operates under Ley 6380/2019 (Modernización y Simplificación del Sistema Tributario Nacional), with the cross-border digital services framework under Resolución General 76/2020 (effective January 2021). Statute, regulation, and SET administrative guidance change; rates, thresholds, sectoral reduced rates, Maquila qualifying conditions, and operational deadlines should be verified against current Paraguayan sources before any decision is made. Engage a Paraguayan Contador Público or tax advisor for transaction-specific analysis. TaxDo accepts no liability for action taken in reliance on this guide.