SET records an increase in income from tax on dividends and profits

September 14, 2021

On September 12, 2021, the “La Nación” website published information on revenue increases through the IDU (Impuesto a los Dividendos y Utilidades – Tax on Dividends and Profits).

1. Amount of tax revenues

The SET (Subsecretaría de Estado de Tributación – Undersecretariat of State for Taxation) computed a total of G. 869,223 million in tax revenues through the IDU (Impuesto a los Dividendos y Utilidades – Dividends and Profits Tax), according to the report of the tax portfolio.

Revenues represent a 127.6% growth compared to what the tax portfolio obtained during the same period last year when it collected a total of G. 381,866 million.

2. Validity of the law

According to the Vice Minister of Taxation, Óscar Orué, the levy became effective as of January 2020 within the framework of the Tax Modernization and Simplification Law. The IDU would be fairer since those who register a higher volume of profits will have to pay more compared to those who invoice less.

3. IDU rates

The IDU rates are 8% for Residents in the country and 15% for Non-Residents in Paraguay. The Undersecretary of State commented that unlike the IRP (Impuesto a la Renta Personal – Personal Income Tax (IRP), which can be totally deducted. There is no such possibility in the case of the IDU, applying the rate to the general value of the profits or capital dividends.

4. Total collection

At the close of the eighth month of this year, the SET continues with a good streak in terms of collections as it recorded a total of G. 11.1 billion up to August, according to data provided by the tax administration. The figures represent a growth of 30.4% more considering that during the same period of the previous year, total revenues were G. 8.5 trillion.

Source: La Nación 13/09/21