Paraguay 2014 VAT changes

The following amendments will be made to the Paraguayan VAT (Impuesto al valor agregado (IVA)) regime from 1 January 2014:

• Export of basic agricultural goods exported will be entitled to a 50% refund on any input VAT
• Goods subject to the reduced 5% VAT rate will no longer have an limit on the amount of input VAT that may be deducted.  Such goods include: pharmaceuticals, leasing, debt interest and foodstuffs.
• Basic agricultural good will no longer be VAT exempt; instead being subject the reduced VAT rate.

The standard VAT rate in Paraguay is 10%.