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Paraguay VAT on digital services and withholding VAT 2020


Paraguay has enacted a tax provision to impose VAT on sales of electronic services to its consumers. This is based on the customer being resident in Paraguay. This may be determined by their IP address, invoice address, bank account or location of issuer of credit card.

The Paraguay tax office, Subsecretaría de Estado de Tributación (SET), has co-opted payment providers into collecting the VAT. Credit card issuers will be oblied to withhold the standard VAT rate, currently 10%.

The new digital VAT obligations will enter into force on January 2020.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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