Paraguay VAT on digital services and withholding VAT 2020
- Oct 25, 2019 | Richard Asquith
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.