Category: Uncategorized

Executive Summary

Standard	Date	Content
Ley 7177/2023	20 de octubre de 2023	Ley De Validez Del Formato Digital de los Documentos de Portación Obligatoria.
Ley 7179/2023	20 de octubre de 2023	Simplificación de Trámites Administrativos en Organismos y Entidades del Estado e Instituciones de Educación Superior Privadas
Ley 7140/2023	28 de agosto de 2023	De Fomento de la Lectura y del Libro

Durante los últimos meses el Congreso Nacional sancionó una serie de leyes que abordan, entre otros, varios aspectos relacionados al Derecho Digital y de Propiedad Intelectual. En ese sentido, a continuación, resumimos los puntos que, a nuestro entender, son los más relevantes en estas materias, así como aspectos generales y de orden práctico del alcance de estas normas, tales como: el proceso de reglamentación y la aplicabilidad de estas; los sujetos obligados; las autoridades de aplicación, entre otros.

Análisis de las Leyes

► Ley 7177/2023 De Validez Del Formato Digital De Los Documentos De Portación Obligatoria (“Ley 7177”)

1. Objeto de la Ley 7177

El pasado 20 de octubre de 2023 el Poder Ejecutivo promulgó la Ley 7177; la norma tiene por objeto otorgar validez oficial al formato digital de los Documentos de Portación Obligatoria (tal y como se define a continuación) (§1). Esto es: que los Documentos de Portación Obligatoria emitidos en formato digital tendrán la misma validez que su versión tradicional en formato físico (§3). Al respecto, es importante mencionar que la Ley 7177 no suprime la validez de los Documentos de Portación Obligatoria en formato físico, sino que ambos formatos coexistirán y serán igualmente válidos.

De acuerdo con el Art. 2 de la Ley 7177 se entiende por documentos de portación obligatoria a: (i) la cédula de identidad emitida por el Departamento de Identificaciones, dependiente de la Policía Nacional; (ii) la cédula verde vehicular emitida por la Dirección del Registro de Automotores dependiente de la Corte Suprema de Justicia; (iii) la licencia de conducir vehicular otorgada por las municipalidades; y, (iv) habilitación vehicular emitida también por el municipio correspondiente (“Documentos de Portación Obligatoria”).

2. Autoridad de Aplicación

La autoridad de aplicación de la Ley 7177 es el Ministerio de Tecnologías de la Información y Comunicación (MITIC), a través del Viceministerio de Tecnologías de la Información y Comunicación, en el marco de las competencias atribuidas en el Artículo 7º de la Ley Nº 6207/2018 Que Crea el Ministerio de Tecnologías de la Información y Comunicación y Establece su Carta Orgánica.

Para la aplicación de la norma, la Ley 7177 establece que, las autoridades que emiten los Documentos de Portación Obligatoria deberán colaborar con la autoridad de aplicación de la Ley 7177, suministrando a ésta toda la información relevante para su publicación en las plataformas oficiales del Gobierno.   

Además, la Ley 7177 le atribuye al MITIC la facultad de coordinar trabajos conjuntos con otras instituciones pertinentes en el ámbito de la digitalización, pertenecientes a la Administración Central del Estado.

3. Vigencia

Si bien la Ley 7177 se encuentra plenamente vigente, desde el punto de vista práctico su aplicación no se producirá hasta tanto no haya reglamentación. En ese sentido, hay aspectos de orden técnico-práctico que precisan ser resueltos y reglamentados, como son, a modo de ejemplo: la interconexión entre la autoridad de aplicación y las autoridades que emiten los Documentos de Portación Obligatoria; la creación y el levantamiento de la plataforma web desde la cual se emitirán los Documentos de Portación Obligatoria en formato digital (“Plataforma Web”); el procedimiento que los ciudadanos y residentes deberán llevar a cabo para obtener sus Documentos de Portación Obligatoria en formato digital, entre otros.

4. Reglamentación

Con respecto, al punto anterior, la Ley 7177 dispone que, a partir de su promulgación, la autoridad de aplicación tendrá hasta 2 (dos) años para implementar y reglamentación la Ley 7177 (§11).

5. Otros aspectos relevantes:

La Plataforma Web, a través de la cual las personas gestionarán y obtendrán sus Documentos de Portación Obligatoria será gratuita. Asimismo, deberá contar con las funcionalidades necesarias para que los usuarios puedan realizar los pagos de aranceles correspondientes directamente a través de la Plataforma Web (§6).

También es importante mencionar que las autoridades, mediante sus funcionarios, estarán obligadas a aceptar como válidos los Documentos de Portación Obligatoria, de lo contrario incurrirán en las sanciones previstas en el Art. 11 de la Ley 7177 (falta grave), y además incurrirán en responsabilidad administrativa exponiéndose a las sanciones previstas para ello en la Ley 1626/2000 De la Función Pública.

Los formatos de los Documentos de Portación Obligatoria que serán admitidos como válidos no se encuentran detallados en la Ley, solo se menciona que el MITIC será la autoridad encargada de desarrollar la Plataforma Web y móvil. No obstante, entendemos que lo más probable es que la operativa de la Ley 7177 se realizará desde el portal de identidad electrónica. Para acceder al texto completo de la Ley 7177, haga click en el siguiente enlace: Ley 7177/2023

► Ley 7179/2023 De Simplificación de Trámites Administrativos en Organismos y Entidades del Estado e Instituciones de Educación Superior Privadas (“Ley 7179”)

1. Objeto y aspectos generales:

El 20 de octubre del 2023, el Poder Ejecutivo promulgó la Ley 7179, que tiene como objeto la simplificación de procesos administrativos ante Organismos y Entidades del Estado en la tramitación de documentos, gestión documental para el acceso a servicios y prestaciones (§1)

El efecto principal de la Ley 7179 es que ninguna entidad del Estado podrá exigir como requisito para gestiones o trámites administrativos la presentación de constancia, certificado u otro documento que ella misma haya expedido, o que, por su naturaleza, debiera constar en sus archivos. Tampoco será exigible la presentación de constancias sobre información que obre en fuentes públicas del Sistema de lntercambio de lnformaciones (Sll),-creada por Decreto N° 8709/2018-, entre Organismos y Entidades del Estado (§2).

Asimismo, la ley obliga a los Organismos y Entidades del Estado que tengan competencia para registrar o legalizar documentos, certificados, diplomas, antecedentes, sentencias judiciales, entre otras, a no requerir aquellos documentos que ya le fueron presentados previamente o que fuera prerrequisito para la obtención del documento que se pretende registrar o legalizar (§3)

También es importante mencionar que, mediante la Ley 7179 se otorga valor oficial a todos los documentos emitidos por el Portal Único de Gobierno por medio de la identidad electrónica. [1]

Sujetos Obligados

La Ley 7179 establece que sus disposiciones se aplicarán las universidades privadas e institutos superiores de educación. (§4); sin embargo, la norma no establece un listado de los demás Organismos y Entidades del Estado que son, a los efectos de esta ley sujetos obligados. Sin embargo, se infiere que están alcanzados por esta ley todas aquellos que tengan las competencias establecidas en el Art. 3 de la Ley.

2. Reglamentación

La Ley 7179 se encuentra vigente, sin embargo, su aplicación práctica dependerá de la reglamentación. En ese sentido, el Poder Ejecutivo tendrá un plazo de 60 días, a partir de la promulgación, para reglamentar la ley.

A nuestro entender, los aspectos principales a reglamentar serían:

1. Definir, al menos de manera sucinta, el listado de organismos y entidades del Estado obligados por esta ley.
2. Un listado orientativo de los certificados, constancias y documentos en general que se encuentran amparados por la Ley 7179 o, de lo contrario, establecer, en forma genérica, la naturaleza y características que estos documentos deben tener.
3. Mecanismo interconexión e intercambio de información entre los sujetos obligados por la Ley 7179.
4. Plazos que deben cumplir los sujetos obligados.
5. Sanciones en caso de incumplimiento.
6. Definición de la autoridad de aplicación.
7. Gratuidad o no de los servicios y fuente de financiación de los mecanismos.

3. Comentarios adicionales

La implementación del Gobierno Electrónico va avanzando en nuestro país. La creación de este tipo de leyes son un claro ejemplo de que el Gobierno aplica la tecnología como aliada estratégica para obtener beneficios tales como la reducción de la burocracia, disminución de utilización de papel y su reemplazo por formato digital (Ley 6562/2020), aumento de la eficiencia en los servicios públicos, transparencia del sector público. Otro de los principales beneficios es que el ciudadano evitará formar largas filas y uso de recursos para trasladarse de una institución a otra, para realizar gestiones o trámites.

Sin embargo, la implementación de los sistemas informáticos sofisticados y seguros, capacitación de los funcionarios en uso de las TICS, la construcción y adecuación de las infraestructuras actuales, entre otras cosas, implica una inversión económica importante, además de un cambio en la cultura y la reestructuración general de los servicios públicos. En ese sentido, el fundamental que el Estado encare estas reformas de manea holística de forma tal a que la inversión se realice de forma eficiente y con el mayor impacto.

► Ley 7140/2023De Fomento de la Lectura y del Libro (“Ley 7140”)

1. Objeto de la ley y sus aspectos más relevantes:

El 28 de agosto del 2023, el Poder Ejecutivo promulgó la Ley 7140/2023. La norma tiene por objeto fomentar la lectura y la escritura, así como a la producción y circulación del libro en cualquiera de sus formatos y soportes, mediante la creación del Fondo Nacional para el Fomento de la Lectura y del Libro (“Fondo Nacional”).

De acuerdo con el Art. 3, la norma tiene como objetivos específicos, entre otros:

1. El diseño e implementación de políticas públicas para el fomento de la lectura.
2. Establecer un presupuesto para dichas políticas públicas.
3. Descentralización y coordinación entre instituciones públicas y privadas.
4. Fomentar la creación, edición y publicación de libros y el fomento de la lectura en las lenguas cooficiales.
5. Promover y apoyar la formación de los sujetos intervinientes en los objetivos de la norma, como maestros y educadores.

Además, las Ley 7140 crea el Plan Nacional de Fomento del Libro y la Lectura como vehículo encargado del cumplimiento de los objetivos de la ley (“Plan Nacional”). El Plan Nacional contendrá programas, proyectos, estrategias, instrumentos relativos a la promoción, difusión, fomento y sensibilización sobre el libro, que serán implementados en todo el territorio nacional y su implementación estará a cargo de las gobernaciones y municipalidades, dependiendo de sus particularidades (§9).

Las gobernaciones y municipios deberán ceñirse a los objetivos del Plan Nacional, los cuales se encuentran detallados en el Art. 10 de la Ley 7140; entre los que se destacan:

1. La difusión de la lectura a través de bibliotecas públicas y digitales y espacios de lectura a nivel nacional;
2. Impresión de materiales bibliográficos para personas con discapacidades;
3. Establecer programas de formación para autores;
4. Promover la difusión de libros de autores paraguayos, incluyendo su traducción;
5. Coordinación con las editoriales, la producción, promoción y difusión de ediciones económicas de obras de autores nacionales.
6. Apoyar la realización de ferias, foros y congresos sobre libros y lecturas
7. Es necesario hacer mención al hecho que el Fondo Nacional es el órgano encargado de administrar los recursos que servirán para la ejecución de políticas públicas de promoción del libro y la lectura, incluyendo el Plan Nacional (§17)

El Fondo Nacional se financiará Financiación, entre otras fuentes, de:

1. El presupuesto asignado a la Secretaría Nacional de Cultura;
2. Donaciones y legados;
3. Fondos provenientes de convenios y acuerdos con instituciones nacionales e internacionales, públicas y privadas que celebre la Secretaría Nacional de Cultura
4. Recursos provenientes de cooperación internacional.

Entre otros beneficios para autores y editores, la Ley 7140 dispone que habrá condiciones preferenciales para el acceso al crédito a editores, libreros y distribuidores (§21) y que, la venta de libros y revistas de contenido cultural y/o científico, de producción nacional y extranjera, y de publicaciones oficiales realizadas en todos los formatos por instituciones del Estado, no tendrá ningún impuesto, tasa o gravamen tributario. Se incluirá dentro de la excepción tributaria la prestación de servicios de acceso al contenido en formato electrónico. Los productos sujetos a la excepción serán todos aquellos registrados en el ISBN (§24). En ese sentido, la norma establece cuales son las obligaciones que deberán cumplir las imprentas y los libros y cualquier producto editorial elaborado en nuestro país, de manera a que puedan ser gozar de beneficios fiscales y de otro carácter, que otorguen las disposiciones normativas.

Otro aspecto muy importante a mencionar es que la Ley 7140 introduce criterios para la compensación equitativa por copia privada, así como los métodos para calcular la remuneración; asimismo, la ley establece quiénes son los sujetos obligados al pago de la remuneración en concepto de compensación equitativa por copia privada y, que la recaudación estará a cargo de las sociedades de gestión colectiva (§29).

Por último, destacar que el Estado paraguayo adopta el estándar internacional ISO 2018 y sus sucesivas actualizaciones para la identificación de libros y productos relacionados que estén a disposición del público en general. Con la entrada en vigor de esta ley, la incorporación del ISBN en los libros y catálogos tendrá carácter obligatorio.

2. Sujetos obligados:

Los sujetos obligados de la Ley 7140 son los editores; autores; fabricantes de equipos, materiales y medios idóneos para realizar la reproducción tanto analógica como digital, de libros; sociedad de gestión colectiva de derechos de autor.

La Ley 7140 establece, asimismo, que el acuerdo editores y autores respecto del número de ejemplares de cada edición y reimpresión deberá estar consignado en contrato de edición por escrito.

3. Autoridad de aplicación:

La autoridad de aplicación de la Ley 7140 es la Secretaría Nacional de Cultura (SNC) (§4), que colaborará y se coordinará con las demás instituciones del Estado, alcanzadas por los términos de la Ley 7140, para el conseguimiento de sus objetivos. Además, se crea el Consejo Nacional de Lectura y el Libro, con carácter asesor y contralor para la aplicación de una política nacional de fomento de la lectura y el libro.

4. Vigencia: La ley se encuentra vigente.

5.  Reglamentación:

La Ley 7140 deberá ser reglamentada por el Poder Ejecutivo, dentro de los 60 días hábiles de su promulgación (§32); a la fecha, a pocos días de cumplirse el plazo establecido en la norma, la Ley 7140 sigue sin ser reglamentada.En ese sentido, consideramos que los principales aspectos abordados en la reglamentación deberán ser, a modo ejemplificativo, mas no exhaustivo, los siguientes:

1. El funcionamiento y las atribuciones del Consejo Nacional de Lectura y el Libro.
2. La creación y el funcionamiento del Fondo Nacional. Es importante destacar que el Fondo Nacional debe ser integrado en un plazo no mayor a 1 año contado a partir de la promulgación de la Ley y que su asignación no podrá ser menor al 10% del presupuesto total asignado a la Secretaría Nacional de Cultura, por tanto, la asignación para el Fondo Nacional ya debería estar contemplada en el PGN 2024.
3. La promulgación, por parte de la Dirección Nacional de Contrataciones Públicas de reglamentos específicos para la compra de libros con formatos accesibles para personas con discapacidad.
4. La creación, por parte de la Dirección Nacional de Propiedad Intelectual, de registro nacional de entidades autorizadas para la adaptación y difusión gratuita de obras en formatos accesibles, el catálogo nacional de obras en formatos accesibles.
5. Las modalidades de recaudación y distribución de la compensación por reproducciones análogas y digitales para uso privado, al igual que las tarifas a aplicar.
6. Reglamentar la forma de recaudación, por parte de las entidades de gestión colectiva, de la compensación equitativa por copia privada a favor de autores, editores y otros titulares. Es importante recordar que, ésta se determinará en función de los equipos, aparatos, soportes, materiales y medios idóneos para realizar dicha reproducción, tanto analógica como digital, que sean fabricados en el territorio nacional o adquirido fuera para su distribución comercial o utilización dentro del territorio. Los equipos, aparatos y soportes materiales involucrados, serán determinados en la reglamentación.

Para obtener más información respecto de alguno de los temas abordados en esta edición de Newsletter, por favor póngase en contacto con nuestros expertos: Manuel Acevedo (macevedo@vouga.com.py); Laura Lezcano (llezcano@vouga.com.py); Grecia Florentín (gflorentin@vouga.com.py); Stephanie Medina (smedina@vouga.com.py) 

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[1] En dicha web se encuentra detallados los pasos para la creación de la identidad electrónica (https://www.paraguay.gov.py/crear-cuenta)

The National Competition Commission (Conacom) issued opinion D/07/2023 (the "Opinion") in connection with the bill titled "On promotion and protection of small and medium producers of yerba mate - Ilex paraguariensis" (the "Bill") passed by the National Congress and awaiting, at the time, enactment or veto by the Executive Branch.

The purpose of the Bill is to promote and protect producers (small, medium and others) of the raw material yerba mate leaf, through the promotion and increase of production, as well as the implementation of measures to ensure a fair economic reward, recognizing the cultural value as an item of national production.

Regarding the fixing of minimum prices, the Bill establishes that the Ministry of Agriculture and Livestock (MAG), in its capacity as enforcement authority, shall issue an annual resolution, which will be binding, establishing the base cost of production of the raw material, based on the opinion of a mixed multidisciplinary commission or on the basis of other technical studies. In other words, the minimum price will be equal to the approved production base cost and any payment below the production base cost will be subject to penalties, applying the sanctions provided for in the Bill (warning, suspension or cancellation of registrations, confiscation and/or fine).

In addition, the Bill proposes that the Banco Nacional de Fomento (BNF) and the Crédito Agrícola de Habilitación (CAH) provide credit lines specially designated for small and medium-sized producers registered with the MAG, subject to compliance with certain requirements.

It is Conacom’s duty to analyze whether there are or could be barriers to competition resulting from the Bill. This analysis is based on the principles established in the 'Guide for regulation with competition criteria'[1] adopted by the institution during 2023.

If regulatory barriers to competition are identified, Conacom analyzes them in the light of three main principles:

1. Principle of necessity: the objective should be to correct a market failure or to achieve the protection of a public or general interest that justifies the intervention of economic activity to be considered necessary.
2. Principle of proportionality: the regulation must be proportionate to the harm it seeks to prevent. In other words, the cost-benefit analysis must show that the benefits of the regulation outweigh the costs, both direct (those resulting from compliance with the regulation) and indirect (undesirable collateral effects due to incentives). To this end, it is essential to analyze the alternatives that could effectively meet the identified need, taking into account the scope of the measure and its duration.
3. Principle of neutrality or non-discrimination: this is essentially based on the premise that the government should not grant competitive advantages to certain companies, regardless of whether they are State-owned or not.  

In the analysis of the possible anti-competitive effects, Conacom joins the position of the OECD, which allows minimum prices as a measure of extremely vigorous competition, generally used as a measure to protect small suppliers from unfair competition. In this particular case, the explanatory memorandum of the Bill mentions that the sector of yerba mate leaf producers is affected by overpricing of inputs, usury and underpricing of their products.

Conacom’s Directors state that they are not aware of the existence of studies on the necessity and proportionality of the measure included in the Bill. However, they emphasize the effects of minimum price fixing, citing among others the loss of economic efficiency resulting from supply and demand, the impairment of the effects of innovation, the creation of a favorable climate for the formation of cartels that influence the fixing of other commercial conditions among market participants, and even the promotion of informality.

The Opinion clarifies that both the available public information and the explanatory memorandum do not provide any justification for the imposition of minimum prices, nor do they provide for transitional or exceptional measures.

With regard to the granting of credit lines by the BNF and the CAH, Conacom notes, on the basis of what UNCTAD[3] has pointed out, that government support measures, in this case the granting of credit, may lead to an improvement in the conditions of competition if the intended objective is achieved. In this case, the difficulty of access to credit for small and medium-sized producers is a known fact that justifies the imposition of a measure that could be considered discriminatory.

The Opinion concludes that any interventionist measure, such as the fixing of minimum prices, must be supported by independent technical studies demonstrating its necessity, proportionality and non-discrimination, and must be exceptional and temporary. In Conacom's Opinion, the Bill lacked such support, so it recommended that the Executive partially veto certain articles of the Bill and that the MAG carry out a market study to facilitate decision-making and the evaluation of alternatives that guarantee the general interest. Finally, the Executive issued a partial objection to the Bill, in particular to articles 3 and 8[4], taking into account the Opinion, together with the Opinion of other public bodies.

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[1] Available in spanish here; https://drive.google.com/file/d/1Lca7nllN701sAF10itI3sSV-FzsFNK8C/view

[2] Organisation for Economic Co-operation and Development

[3] United Nations Conference on Trade and Development

Article 3: "The enforcement authority of this law is the Ministry of Agriculture and Livestock. It is empowered to convene public and private institutions respectively to establish dialogue instances among all sectors of the Yerba Mate production chain. Additionally, it can issue regulatory resolutions aimed at achieving efficient and effective action in favor of small, medium, and other producers of Yerba Mate leaf raw material. The Multidisciplinary Joint Commission for the study of Yerba Mate issues, created by Decree No. 19820 in 1998 and its amendments, serves as a consulting body to the Ministry of Agriculture and Livestock. It must provide technical opinions to establish the production base cost in October of each year, before the start of the following agricultural harvests of Yerba Mate leaf raw material. The Ministry of Agriculture and Livestock, by resolution to be issued no later than November 10 of each year, must establish the production base cost of Yerba Mate leaf raw material according to the technical opinion of the Multidisciplinary Joint Commission or, in its absence, based on updated technical studies. The price to be paid to small, medium, and other producers shall be above the production base cost, and any price paid below the production base cost of Yerba Mate leaf raw material shall constitute a serious offense and be subject to sanctions. Resolutions issued by the Ministry of Agriculture and Livestock shall be enforceable, and the involved sectors are obligated to comply, under penalty of suspension or cancellation of registrations and/or authorizations as operators in the Yerba Mate production chain."

Article 8: "Any violation or non-compliance with the obligations established in this law will be sanctioned by the enforcement authority, following the instruction of an administrative summary that guarantees the alleged infractor the right to defense. The applicable sanctions may include a warning, suspension, or cancellation of registrations with the relevant institutions, as well as confiscation and/or a fine of up to 200 (two hundred) minimum daily wages for unspecified activities in the Republic. The procedure for applying these sanctions, the circumstances of the commission of the acts and/or behaviors that generate them, their severity, and the maximum amount that may be imposed for each infringement, within the limit set by this law, as well as the appropriateness of other sanctions, will be regulated by the Executive Branch. Fines imposed under this law must be allocated to the institutional strengthening of the Ministry of Agriculture and Livestock for the fulfillment of the technical assistance and training function for small and medium Yerba Mate producers. Violations falling under the competence of the National Service of Quality and Phytosanitary and Seed Health will be sanctioned according to its legislation."

Executive Summary

Standard	Content	Date
Resolution N° 355	The National Directorate of Tax Revenues ("DNIT") has delegated administrative powers to the General Internal Revenue Directorate ("GGII") and its dependencies, and repealed Resolution No. 99/2023..	September 22, 2023
Binding Consultation	The former Undersecretariat of State for Taxation ("SET") issued its opinion on the inapplicability of the request made by the taxpayer to exempt it from the obligation to withhold Value Added Tax ("VAT") to a non-resident reinsurer.	August 2023
Binding Consultation	The previous SET ruled on the deductibility of expenses for services, when the provider is the owner or when he is not a taxpayer of Personal Income Tax ("IRP"), indicating that the deductibility limit of 1% of the taxpayer's gross income for the fiscal year applies..	August 2023
Administrative Court Ruling N° 172/2023	The Second Chamber of the Court of the Administrative Courts of the Judiciary decided not to uphold a contentious-administrative action brought against administrative acts that resulted in a binding consultation through which the former SET confirmed that the taxpayer, as a maquiladora company, is obliged to withhold Non-Resident Income Tax ("INR") for services received from foreign entities without tax residence in Paraguay.	August 2023

More information:

► Resolution N° 355 of the DNIT - Whereby powers are transferred and delegated to bodies of the DNIT

Through Resolution No. 355 of the DNIT (the "RG 355"), it was established that the highest authority of the DNIT, which is the National Director, will be vested with the powers of the GGII with respect to certain administrative acts, among which we mention the following: (1) Resolution of requests for tax credit refund and repetition of undue or excess payment for amounts exceeding Gs. 100,000,000; (2) Resolution of appeals for reconsideration filed against (2.1) the particular resolutions of tax assessment and application of penalties derived from administrative summaries, (2.2) the refund of tax credits of the exporter in the accelerated regime and (2.3) repetition of undue or excess payment; (3) resolution of appeals for reconsideration filed against the answers to the binding consultations, among others.

Avocation is an administrative law technique used in the public administrative organization to transfer the powers to resolve a specific matter from a hierarchically inferior body to a superior one. This technique is only effective between organs of the same administration, such as the GGII with respect to the National Director of the DNIT.

On the other hand, the highest authority of the DNIT delegates to the head of the GGII the powers to execute the following administrative acts: (a) Audit orders and their extensions, together with the Intervening Director; (b) Resolution of administrative proceedings for tax assessment and application of penalties; (c) Granting of extraordinary payment facilities up to twenty-four (24) monthly installments; and, (d) Answers to binding and non-binding consultations, among others.

In addition, the highest authority of the DNIT establishes powers to perform certain administrative acts to the following entities: (a) Directorate of Taxpayer Assistance and Tax Credits; (b) General Directorate of Tax Auditing; (c) General Directorate of Collection and Regional Offices; (d) General Directorate of Large Taxpayers; and (e) Directorate of Tax Planning and Technique.

► Response to the Guiding Consultation on the inapplicability of the exemption from withholding INR for reinsurance services rendered by non-residents

Through a response to a binding consultation during August 2023, the former SET established its position on the inapplicability of a request for exemption from the obligation to withhold VAT to a non-resident provider of reinsurance services. As the main argument for this request, the taxpayer explained that it has a VAT tax credit in its favour from previous tax periods.

In response to these arguments, the former SET explained that it was not relevant whether or not the taxpayer making the request had a VAT tax credit from previous periods since, in this case, the tax obligation to act as a withholding agent was triggered because the taxpayer received a service from a non-resident. Thus, the SET concluded that, in all cases, the consulting taxpayer must act as a VAT withholding agent when it receives a service from a non-resident, regardless of the amount of tax credits in its favor.

► Response to the Guiding Question on the deductibility of expenses for services paid to the owner of a sole proprietorship or to service providers who are not IRP taxpayers.

In this regard, the former SET explained that to consider such expenditures as deductible under the expenses item, first of all, they must be necessary to carry out the economic activity developed by the company, i.e., comply with the causality principle.

Having said the above, in response to the binding consultation, the SET concluded that expenses for services rendered by the owner to the sole proprietorship or by third parties that are not IRP taxpayers could be deducted within the limit of 1% of the gross income of the tax year of the IRE taxpayer. Amounts that surpass such threshold are non-deductible expenses in determining the IRE for the sole proprietorship.

► Administrative Court Ruling No. 172/2023 by which the Second Chamber of the Administrative Court confirmed the SET's criterion that a maquiladora company must withhold INR when it receives services from a non-resident entity.

The Second Chamber of the Court of Accounts resolved a contentious administrative action brought by a maquiladora company incorporated in Paraguay, which made a binding consultation to the former SET on the inapplicability of the obligation to withhold the INR. As the basis of its arguments, the taxpayer argued that being a maquiladora company, its income is taxed by the Tributo Único de Maquila ("TUM") and not by the IRE. Accordingly, the taxpayer argued that it is essential to observe the wording of Article 73, numeral 11 of Law No. 6,380/2019 ("Tax Law"), which provides as follows:

“…In addition, income from Paraguayan sources is considered income from:...

11. Services rendered by legal entities and other entities not resident in the Republic, performed from abroad or in the national territory, as long as they are related to the obtaining of income taxed by the IRE..." (emphasis added).

Thus, the taxpayer argued that since the services rendered by the non-resident are linked to income taxed by the TUM and not by the IRE, they are not obliged to withhold the INR since the income obtained by the non-resident service provider is not considered Paraguayan source income. In other words, the taxpayer alleged the "non-taxation" by the INR of the services rendered by the foreign suppliers to obtain income taxed by the TUM due to the lack of the territorial element of the taxable event. These arguments are sound, in accordance with the principle of legality, provided for in article 179 of the National Constitution.

However, the former SET and the Court of Auditors ruled that taxpayers must withhold INR in these cases. The basis of the former SET was that the TUM is equivalent to the IRE and constitutes a sort of special regime of the latter, with a reduced rate and not a different tax, and therefore, the withholding of the INR is appropriate. The Second Chamber of the Court of Accounts, contrary to the previous SET, recognized that the IRE and the TUM are two different income taxes but approached the matter from the perspective that the benefits of the maquila regime only reach the local maquila companies and not their suppliers abroad, for whom the maquila regime does not imply any exemption from INR.

In other words, the Court of Audit approached the issue raised from the point of view of the benefits of the maquila regime and the INR exemptions. In contrast, the dispute was about the INR rules and the "non-taxation" that would occur without the territorial element of the tax for services unrelated to the IRE.

Based on the above, the Second Chamber of the Court of Accounts held that the entry into force of the INR with the Tax Law does not collide with the maquila regime and, although it recognizes that the IRE and the TUM are two different income taxes, it concludes that the taxpayer operating under the maquila regime must withhold the INR when it receives services related to the IRE and the TUM and that the taxpayer operating under the maquila regime must withhold the INR when it receives services from nonresidents. This decision may still be appealed before the Supreme Court of Justice.

In this second section of our series on fintech regulation in Paraguay, we review the regulatory efforts of some of the most dynamic financing modalities offered by the fintech industry: crowdfunding and lending through crowdfunding platforms.

1. Crowdfunding

In crowdfunding, a group of investors finances a project or venture in exchange for bonds, obligations, shares, participation, dividends, or project-related income, among other benefits.

Law No. 5810/17 on the Securities Market explicitly excludes crowdfunding or collective financing from its application, stating in article 8 that "[...] credit contracts under the collective financing modality, either through platforms or other means," are not covered by its scope.

While Paraguay does not have specific regulations for crowdfunding, these activities are legal in the country, and some sectors consider necessary to regulate these activities, taking into account the financing opportunities they provide for small and medium-sized enterprises (SMEs) and startups. In this regard, the Superintendency of Securities (the "SV") is working with key industry players on the drafting of a bill to regulate crowdfunding activities.

1.1. Projected Bill and Potential Implications

The National Securities Commission, now the Superintendency of Securities, has drafted a bill to regulate crowdfunding platforms. The bill has not yet been presented to the Legislative Branch, as we understand they are finalizing details for its submission.

According to its current wording, the bill aims to establish the SV as the enforcing authority of the law and requires platforms to submit information to the Information Center of the Superintendency of Banks, a subsidiary of the BCP.

The bill defines 'crowdfunding' as the public solicitation of funds from a large number of individuals to finance a business, project, or cause.

Additionally, crowdfunding platforms are defined as "[...] companies that, through a website, electronic systems, digital means, or other mass communication methods, regularly connect a plurality of natural or legal persons offering financing with others seeking some form of financing."

The bill regulates not only crowdfunding platforms but also lending or collective lending platforms. In this sense, it seeks to formalize crowdfunding and lending as forms of collective financing in the national legal framework. The bill also includes provisions applicable to factoring crowdfunding through platforms.

If the bill is passed in its current form, investment, lending, and factoring crowdfunding activities would fall under its scope. This means that crowdfunding platforms would include platforms that provide collective financing in any of these modalities.

It is worth noting that these crowdfunding platforms would not be permitted to engage in activities other than those expressly authorized, unless expressly authorized by the SV and provided they have sufficient mechanisms and procedures in place to minimize conflicts of interest that may arise in the exercise of their activities.

In addition, these platforms would not be allowed to provide recommendations or personalized advice on the investments they facilitate, nor participate as investors or promoters (defined as individuals who request funds through these platforms) in collective financing operations they facilitate. They would only be allowed to charge fees and commissions for providing their services.

The bill provides for the creation of a Registry of Crowdfunding Platforms, which will be managed by the SV. Registration requirements for platforms include the incorporation of a company, minimum capital requirements set forth by the SV, and having operational and technological risk mitigation procedures in place.

Additionally, the bill imposes obligations on the platform to ensure that investors and promoters are protected when participating in this form of financing. For this purpose, platforms must collect and monitor information about promoters, investors, and the transactions conducted through their means, in particular the agreed interest rates.

Finally, the bill outlines the types of offenses, their gradation, and the sanctions that may be imposed by the SV, ranging from warnings and disqualification from engaging in this activity to fines of up to three hundred times the minimum monthly wage (approximately USD 115,000).

2. Lending

Lending, along with crowdfunding, is a widely used form of collective financing around the world. In lending, unlike crowdfunding, a group of individuals lends funds to individuals or legal entities in exchange for the repayment of the capital provided, together with interest thereon.

The granting of monetary loans, whether by individuals or legal entities who do so on a regular basis (the "Lenders"), is regulated by the BCP, as detailed in the following section. However, lending as a form of collective financing typically requires the intervention of a platform to facilitate it. Therefore, the draft of the proposed bill for the regulation of crowdfunding platforms includes the regulation of this activity within its scope.

Currently, there are crowdfunding platforms in Paraguay focused on lending that have connected thousands of investors with users in need of credits.

2.1. Applicable Regulation

The BCP, through Resolution No. 7/19 (the "Lending Resolution"), included individuals and legal entities that regularly provide monetary loans as subjects of Law No. 861/96 of "General Law of Banks, Financial Institutions, and Other Credit Entities" and its amending Law No. 5.787/16 of "Modernization and Strengthening of the Regulations Governing the Operation of the Paraguayan Financial System."

As a result, the BCP created the Registry of Monetary Lenders, where any individual or legal entity regularly engaged in granting credits (the “Lenders” as defined above) must be registered.

Subsequently, the BCP issued Resolution No. 30/22, establishing the Regulatory Framework for Information Transparency and Integrity Management for the Lenders.

This new resolution introduced specific obligations for the Lenders. The Lending Resolution explicitly states that the Lenders must comply with the BCP's regulations on corporate governance, complaints and inquiries Management, and interest rates.

Additionally, it requires Lenders to sign contracts, either in physical or digital form, for loan transactions. These contracts must include details such as the loan amount, maturity date, interest rate, fees, expenses, and penalties.

The Lending Resolution also establishes obligations for the transfer of credit portfolios, in particular related to notifying the borrower of the transfer, including a 5-day period for such notification after the purchase is formalized, and ensuring that the notification has been made correctly.

The provisions related to the Lenders are effective in regulating the activities of individuals who regularly grant credits with their own funds. However, lending through crowdfunding is a more dynamic activity that requires its own regulation.

Therefore, it is appropriate that the scope of the bill includes this activity and the platforms that facilitate it. Thus, if the current bill is passed, the granting of money loans through lending platforms would be supervised by the SV rather than the Superintendency of Banks.

Las altas temperaturas registradas durante los meses de setiembre y octubre del corriente año, así como el pronto ingreso de la estación de verano que promete ser más calurosa que años anteriores, genera la necesidad de que los empleadores, tomen en consideración las disposiciones que para estos casos están establecidas en el Código de Trabajo[1] (CT), el Reglamento General Técnico de Seguridad, Higiene y Medicina en el Trabajo[2] (“RGTSHMT”), la Ley de Prevención de Riesgos Laborales[3] (LPRL), sus modificaciones y  reglamentaciones, a fin de cuidar de la salud y bienestar de sus trabajadores, y evitar incurrir en contingencias innecesarias.

Dada la obligación del empleador de garantizar la higiene, salud y seguridad de sus trabajadores, es importante adoptar aquellas medidas indicadas por la legislación vigente para prevenir los riesgos derivados de la exposición a las altas temperaturas en tiempos estivales.

Conforme el RGTSHMT todos los trabajadores deben estar debidamente protegidos contra irradiaciones directas y excesivas de calor, evitando exponerse a índices que sobrepasen los valores WBGT, calculados en función a los parámetros establecidos en la citada disposición legal[4].

Régimen de Trabajo y descanso Tipo de Trabajo	Ligero °C	Moderado °C	Pesado °C
Trabajo continuo	30,0	26,7	25,0
75% y 25% de descanso, cada hora	30,6	28,0	25,9
50% y 50% de descanso, cada hora	31,4	29,4	27,9
25% y 75% de descanso, cada hora	32,2	31,1	30,0

Las exposiciones al calor más intensas solo son permisibles si los trabajadores son sometidos a exámenes médicos previos que comprueben su tolerancia al trabajo en ambientes calurosos.

En especial, en caso de trabajadores expuestos a altas temperaturas, es necesario considerar lo siguiente:

1. Suministro de agua potable suficiente, fresca y próxima al puesto de trabajo;
2. Empleo de ropa ligera de verano;
3. Realización de exámenes médicos periódicos para trabajadores expuestos a altas temperaturas.

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[1] Ley 213/93 y sus modificaciones.

[2] Decreto N° 14.390/92.

[3] Ley 5.804/17.

[4] Art. 228 del RGTSHMT.

According to data published by The Global Findex Database 2021 survey, Paraguay had a bank account ownership rate of 54%. Furthermore, according to the latest data published by the Central Bank of Paraguay ("BCP") in August 2023, the population's bank account ownership rose to approximately three-quarters of the country's population, at 76%.

This substantial surge in account ownership in recent years can be attributed not only to the growth of traditional financial institutions in the country but also to the emergence of Fintech companies in the Paraguayan financial market.

Fintech companies have become key tools for financial inclusion. The Fintech industry has generated disruptive alternatives for financial inclusion all around the world, which governments have been regulating and adopting in their inclusion efforts.

We will provide a brief summary of the latest advances in the regulation of the current main Fintech tools in Paraguay, including aspects closely related to these tools, such as personal data and its treatment. The summary will be delivered in four sections.

In this first section, we will highlight relevant aspects of the regulation of one of the most effective financial inclusion tools offered by the Fintech industry: digital wallets or, as referred hereafter: e-wallets..

1. e-wallets

Entities that provide e-wallet services in Paraguay are known as EMPE or EMPEs. EMPEs are companies authorized and supervised by the Central Bank of Paraguay to process, manage, and, in general, provide services related to mobile money and e-wallets. Through e-wallets, users can make payments to businesses and transfer electronic money, whether to users of the same e-wallet, different e-wallets, or even to individuals who do not have accounts with any of the e-wallets operating in the country.

With approximately 2.7 million active accounts and monthly transactions of approximately $160 million, e-wallets play a significant role in the country's digital transformation and serve as a tool for financial inclusion.[3]

1.1. Applicable Law

Regulation of e-wallets in Paraguay consists of a set of resolutions issued by BCP and the Secretariat for the Prevention of Money Asset Laundering ("SEPRELAD").

Among the BCP's resolutions are Resolution No. 6/14 and its amendment, No. 6/20, which establish the general conditions for the operation and registration of EMPEs in Paraguay. Additionally, Resolution No. 10/2019 contains provisions related to the information that EMPEs must provide annually to BCP as the regulatory authority.

In addition, SEPRELAD Resolution No. 77/20 outlines the operational framework of measures to combat money laundering and the financing of terrorism that EMPEs must implement, as well as the authorities responsible for supervising these procedures within their structure.

1.1.1. BCP Resolutions

BCP issued Resolution No. 6 in 2014 which -along with its amendment, Resolution No. 6, issued in 2020- currently serves as the national regulatory framework for EMPEs and e-wallets. Through this resolution, BCP declares that e-wallets should be considered as financial inclusion tools that aim to integrate the unbanked population into the national financial system. In this scenario, e-wallets seek to address market needs related to small-scale commercial financing.

In that sense, the documentation requirements for user registration with e-wallets are straightforward, and the registration process is entirely digital.

The Resolution mandates that EMPEs may provide e-money provisioning services and non-bank electronic transfers ("remittances") among their users and the general population through their e-wallets. It also establishes that electronic money will be accepted as a means of payment and will be convertible into cash.

It's worth noting that EMPEs are not authorized to engage in financial intermediation activities or to grant loans from their own funds to users. Also, the funds deposited by users in their accounts do not constitute bank deposits.

Instead, e-wallets function more as a platform for storing electronic money, allowing users to convert their cash into electronic money that can later be converted back into cash, usually for a commission fee charged by the EMPE.

In line with BCP's focus on small-scale activities, the limit on the amount of electronic money that users can store in their accounts is quite limited. Funds exceeding this limit are deposited in a financial institution.

A monthly limit for sending and receiving money transfers is also set for users. If this limit is exceeded, these transactions are made through accounts opened with financial institutions.

As mentioned above, e-wallet users can send money to individuals who do not have an e-wallet account. In that case, the funds can be withdrawn, or the individuals can register with the e-wallet through which the transfer was sent and use the funds from their new e-money account.

Regarding the security of e-money stored in e-wallets, the BCP's regulatory policy stipulates that all funds held by each account holder, agent and point of sale must be held in trust or deposited with the BCP. In fact, EMPEs may secure these funds using both methods, provided that the trust and BCP deposits cover all funds held by account holders, agents, and points of sale. In practice, most EMPEs in the country have chosen to establish trusts as their method of securing funds.

1.1.2. SEPRELAD Resolutions

EMPEs have their own Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Rules and Regulations, issued by SEPRELAD through Resolution No. 77/20. This resolution includes, among other measures, the requirement to conduct due diligence on e-wallet users.

In addition, the resolution mandates the existence of an AML and CTF Committee, which must include at least two members of the EMPE Board of Directors. This committee will be chaired by the EMPE's Compliance Officer, who must have a direct, full-time and exclusive employment relationship with the EMPE or its economic group and hold a top management position.

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[1] This includes accounts owned at any regulated institution, such as banks, credit unions, microfinance institutions and e-wallets.

[2] Financial Inclusion Indicators and Data. August 2023. Central Bank of Paraguay.

[3] Statistical and Financial Bulletin of EMPEs. July 31, 2023. Central Bank of Paraguay.

Law 7190/2023 "On Carbon Credits" (the "Law"), enacted on October 12, 2023, marks a significant milestone for Paraguay and positions it at the forefront of Carbon Credit regulation in the region.

The Law regulates, among others, the ownership of Carbon Credits generation projects and the creation of the Carbon Credit Registry, to be administered and supervised by the Ministry of Environment and Sustainable Development (Mades) as the enforcement authority for the Law.

The Law establishes that the ownership of Carbon Credits belongs to the owners of the property, or the assets assigned to the project, including the surface rights’ owners pursuant to Law 4890/2023 on Surface Rights, or to those to whom the rights have been assigned.  

The Carbon Credit Registry, pending to be regulated by Mades, will register the projects generating carbon credits, the holders of such projects, any modification, transfer, or assignment of carbon credits by the holders, as well as credits generated outside the country and acquired by residents in Paraguay. Among the main objectives of this registry, it is worth mentioning the prevention of double counting of carbon credits in registered projects and the publicity of the projects and the carbon credits generated by them. The Law does not restrict the registration of carbon credits before other national or foreign registries or carbon standards.

Carbon credits may be transferred in full or in fractions, except for a percentage of 3% to 10% (to be determined by Mades) that may not be transferred to ensure compliance with Paraguay's Nationally Determined Contributions (NDC) . It is important to note that the transfer of carbon credits is exempt from Value Added Tax (VAT).

The Law also establishes the possibility of requesting Mades to issue a Non-Objection Certificate to the transfer of carbon credits abroad, to avoid double accounting of credits, prior to their registration in the Carbon Credit Registry. In addition, the Law establishes as a requirement that the Project Developers (professionals or companies in charge of elaborating the project to be submitted to the Carbon Standard, as defined in the Law) must have a participation of at least 50% of Paraguayan labor.

Potential infringement of the Law and applicable regulations, such as failure to register in the registry, providing false information, failure to withhold NDCs, and others, will be sanctioned with temporary or permanent disqualification from registration in the registry and fines.

In our view, the inclusion of a regulation on this matter benefits both the public and private sectors. The law provides clarity and reliability to the local carbon market, which should encourage investments in carbon mitigation projects in Paraguay.

Vouga Abogados is participating in several of the largest carbon credit projects in the country. For further information, please contact our team: Rodrigo Fernandez (rfernandez@vouga.com.py) , Rodolfo G. Vouga (rgvouga@vouga.com.py) and Cecilia Vera (cvera@vouga.com.py)

Our partner Rodolfo Vouga discusses the dynamic landscape and opportunities in the carbon sector, touching on policies and initiatives that are shaping the future of Paraguay during the Paraguay Investor Day organized by @Citibank in New York.

Watch the video!

The Paraguayan House of Representatives approved the "Carbon Credits" Bill without amendments to the bill approved by the Senate, which can be downloaded in the following link

The bill will be sent to the Executive Branch for its enactment or veto.

For further information, please contact our team: Rodrigo Fernandez (rfernandez@vouga.com.py), Rodolfo G Vouga (rgvouga@vouga.com.py) and Cecilia Vera (cvera@vouga.com.py).

Executive Summary

Standard	Date	Content
Law N° 7143	August 04, 2023	The National Directorate of Tax Revenues ("DNIT" per its Spanish acronym) is created.
Decree N° 83	August 18, 2023	The Presidency of the Republic appoints Mr. Oscar Orué, former Vice-Minister of the Undersecretariat of State for Taxation ("SET"), as National Director of DNIT.
Decree N° 82	August 18, 2023	The Presidency of the Republic establishes the validity of Law No. 7143/2023 creating the DNIT.
Resolution N° 99	August 29, 2023	The DNIT establishes administrative measures regarding the subscription of certain administrative acts issued by the DNIT, the General Management of Internal Taxes and its dependencies.
Binding Consultation	August 2023	The SET issued its opinion on the inapplicability of Value Added Tax ("VAT") to the provision of call center services through the Internet for customers located abroad.
Administrative Court Ruling N° 174/2023	August 2023	The First Chamber of the Administrative Court ruled to admit a lawsuit against the Municipality of José Félix Estigarribia, which sought the taxation of the municipal patent tax for agricultural and livestock activities.

More information:

► Law No. 7143/2023 – Though which the DNIT is created

On August 4, 2023, the Executive Branch enacted and published Law No. 7,143/2023 (the "DNIT Law"). This law created the DNIT, which is a new public law entity. For that purpose, the former SET was separated from the then Ministry of Finance (now the Ministry of Economy and Finance) and merged with the National Customs Directorate ("DNA").

The purpose of the DNIT is to collect both customs and internal taxes, and it has all the functions and powers previously held by the SET and the DNA over the respective taxes corresponding to each area.

The DNIT is an autonomous public law entity communicating with the Executive Branch through the Ministry of Economy and Finance but is no longer part of the latter. You can access a more extensive analysis we prepared on the Law of the DNIT through the following link.

► Decree No. 83/2023 – The Presidency of the Republic appoints Mr. Oscar Orué, former Vice-Minister of SET, as National Director of DNIT.  

Through Decree No. 83/2023, the Presidency of the Republic appointed Mr. Oscar Orué, who previously served as Vice Minister of SET, as National Director of DNIT.

With this appointment, the National Director has continuity in the functions he previously performed as the highest authority of the SET and will be in charge of implementing the DNIT Law, by which the SET and the DNA are merged.

As the first official act after his appointment, the National Director appointed Braulio Ferreira as Executive Manager, Ever Otazú as General Manager of Internal Taxes and Juan Olmedo as Customs Manager.

► Decree N° 82/2023 – The Presidency of the Republic establishes the validity of the DNIT Law and other provisions on the functions of this entity

Through Decree No. 82/2023, the Presidency of the Republic established that the DNIT Law and the transitory rules for its effective implementation are in force. While the merger process between the former SET and the former DNA takes place, the institutional continuity of the entities that are in the process of integration is necessary, as well as legal certainty for taxpayers and users of foreign trade.

In this sense, as a reason for the decree mentioned above, the Presidency of the Republic explains in the reasons for the Decree that it is necessary to appoint a person in charge to carry out the merger process until the organizational structure and the manual of functions of the DNIT and its divisions are approved. Consequently, the DNIT Law became effective from the day following its publication in the Official Gazette on August 22, 2023. However, several provisions of the DNIT Law will enter into force at a later date, as follows:

On the other hand, until the implementation of the units and operative departments that will be established by regulation, the temporary structure of the DNIT will be as follows:

Finally, through the referred Decree No. 82/2023, the Presidency of the Republic designated the Executive Management as the unit responsible for organizational restructuring and regulation of the Law of the DNIT. The National Director must report to the Executive Branch through the Ministry of Finance on the progress made in merging or amalgamating the organizational structures of SET and DNA.

► Resolution No. 99 issued by DNIT – Whereby administrative measures are established with respect to the subscription of certain administrative acts issued by the DNIT

Through Resolution No. 99 of the DNIT (the "RG 99") it was established that the highest authority of the DNIT, which is the National Directorate, will take over the competences of the General Internal Revenue Directorate with respect to certain administrative acts, among which we mention the following: (1) Resolution of requests for tax credit refund and repetition of undue or excess payment; (2) Resolution of appeals for reconsideration filed against (2.1) the particular resolutions of tax assessment and application of penalties, (2.2) the response to binding consultations and (2.3) resolutions on tax credit refund and repetition of undue or excess payment; (3) Issuance of executive title or debt certificate, among others.

Avocation is an administrative law technique used in the public administrative organization to transfer the powers to resolve a specific matter from a hierarchically inferior body to a superior one. This technique is only effective between organs of the same administration.

On the other hand, the highest authority of the DNIT delegates to the head of the General Directorate of Internal Taxes the powers to execute the following administrative acts: (a) Audit orders, together with the Intervening Director; (b) Resolution of administrative proceedings for tax assessment and application of penalties; (c) Execution of the guarantee in the accelerated tax credit refund system of the exporter; and, (d) Answers to binding and non-binding consultations, among others.

In addition, the highest authority of the DNIT establishes powers to perform certain administrative acts to the following entities: (a) Directorate of Taxpayer Assistance and Tax Credits; (b) General Directorate of Tax Auditing; (c) General Directorate of Collection and Regional Offices; (d) General Directorate of Large Taxpayers; and (e) Directorate of Tax Planning and Technique.

► Response to Binding Consultation on the non-applicability of VAT to the provision of call center services via internet to foreign customers

Through a response to a binding consultation issued during August 2023, the SET established its position on the non-applicability of VAT on call centre services provided from Paraguay to customers outside the country.

For VAT not to be applied to this type of service, the operation must be within the digital services category and used outside the Paraguayan territory. According to the provisions of Law No. 6,380/2019 (the "Tax Law"), digital services are those services that are made available to the user through the internet or any adaptation of protocols and that are essentially characterized by being (a) automatic and (b) not feasible in the absence of information technology. Decree No. 3,107/2019, which regulates the VAT of the Tax Law, establishes that call centre services are digital services if they are provided through the internet or other networks.

Thus, for the service in question to be considered as provided to customers abroad and used outside the country, it is necessary that none of the following elements are located in Paraguay: (a) IP address of the device used by the customer; (b) country code of the SIM card; (c) billing address of the customer; (d) bank account used for remitting the payment; (e) billing address of the customer available to the bank; (f) financial entity issuing the SIM card; (g) bank account of the customer; (h) bank account of the customer used for remitting the payment; (i) bank account of the customer used for the payment; (j) bank account of the customer used for remitting the payment; (k) bank account of the customer used for remitting the payment; and (l) bank account of the customer used for remitting the payment.

Consequently, the SET responded by endorsing that call centre services that meet the indicated conditions may issue an invoice without generating a VAT tax debit.

► Administrative Court Ruling N° 174/2023 by which the First Chamber of the Administrative Court ruled that the municipal patent tax for an agricultural company was inapplicable

The First Chamber of the Administrative Court resolved a contentious administrative action brought by a company engaged in agricultural activities against the claim of the Municipality of Mariscal Estigarribia to collect the municipal trade tax on the assets that this company has in such Municipality. As the primary basis for filing this action, the taxpayer argued that the company does not carry out industrial, commercial or professional activities and, therefore, is not obliged to pay the municipal trade tax, as provided for in Law No. 620/1976.

The representative of the defendant Municipality answered the contentious administrative lawsuit mainly arguing that the plaintiff company is constituted as a mercantile entity in the General Directorate of Public Registries and that it has a merchant's registration and, therefore it is obliged to comply with the obligations related to such condition. Consequently, such formalities are, in themselves, acts of commerce, and for this reason, all entities of a mercantile nature are obliged to pay the municipal patent tax.

The First Chamber of the Administrative Court resolved the matter in a majority (vote of two of the three members), upholding the action filed by the plaintiff company, since it understood that the agricultural production activity is not included in the factual assumption of the tax and, therefore, is not taxed by it. Consequently, it ordered the revocation of the contested administrative acts, by which the plaintiff was ordered to pay the municipal patent tax.

Although this ruling is favorable to the plaintiff company, it cannot be ignored that the Municipality may appeal this resolution and submit it to review the Penal Chamber of the Supreme Court of Justice. It is essential to note that the position of the Supreme Court of Justice on this point has varied over time, and there is case law supporting the arguments of the plaintiff company in the present case, as well as case law against such claims, the latter being the trend in recent years.