• Law No. 6,656/2020

Paraguay can exchange tax information of taxpayers with other countries that participate in the Convention on Mutual Administrative Assistance in Tax Matters (the "Convention") and also request tax information from them, starting from tax periods beginning in January 2022. The Convention was adopted in Paraguay's domestic legal system through Law No. 6,656/2020 and, is an international multilateral treaty by which the tax authorities of 144 signatory States establish means to cooperate with each other to achieve greater tax transparency and exchange tax information.

  • Modalities for the exchange of information accepted by Paraguay

The Undersecretariat of State for Taxation ("SET"), may exchange information under the following modalities:

  1. By request.
  2. Automatic exchange of information.
  3. Spontaneous exchange of information.
  4. Simultaneous tax audits.
  5. Foreign tax audits.

It is important to note that the SET has not yet adhered to any bilateral or multilateral agreement with other tax authorities to establish the terms and conditions for the automatic exchange of information, so that, in practice, this modality will not be applied yet. In addition, Paraguay clarified that, as a general rule, it will not accept requests for tax audits carried out by the requesting State in the country.

  • Reservations made

Paraguay made a reservation with respect to the following points of the Convention:

  1. Paraguay will not provide assistance with respect to taxes pertaining to political subdivisions or local authorities of the other countries; social security obligations; or other categories of taxes such as property taxes; inheritance taxes; gift taxes; real estate taxes; motor vehicle property taxes; and any other type of tax. It should be noted that Paraguay will provide assistance with respect to general excise taxes such as Value Added Tax or specific excise taxes.
  2. No assistance will be granted in the collection of tax credits from other States.
  3. No assistance shall be granted for the service of documents from other States.
  4. Paraguay will exchange information for tax matters involving intentional conduct subject to judicial proceedings under the criminal laws of the requesting State. The exchange of this type of information will only be applicable to tax periods that started from January 01, 2018, onwards.