According to the new tax reforms, the SET (Subsecretaría de Estado de Tributación – Undersecretariat of State for Taxation) should start with the corresponding reviews from January 1, 2022.
Transfer Pricing Studies Filing
There is no specific deadline to file the Transfer Pricing documentation or Technical Study; conversely, this document should be prepared before the fiscal year-end to determine whether the intercompany transactions must be adjusted.
According to the new tax reforms, the SET should start with the corresponding reviews from January 1, 2022.
Entities Oligated to File the Transfer Pricing Studies
Currently, Paraguay is just starting to implement uniform legislation for Transfer Pricing. In this regard, the review of transactions in 2021 should begin for the fiscal period of 2022.
Thus, due to the absence of regulations, through Law No. 6380, taxpayers performing related-party transactions must obtain and keep a Technical Study to file the Informative Affidavit.
Related Parties for the Paraguayan Legislation
Article 37 of the Law of “Modernization and Simplification of the National Tax System” states that (legal or physical) two or more persons are related parties when directly or indirectly participate in the administration, control, or capital among them. For example:
- It will be considered related by capital according to the norm when directly or indirectly participating in more than 50% of the share capital;
- A person includes physical persons and legal entities, permanent establishments, national/foreign trusts, and
- Residents located in low or no-taxation jurisdictions, including free trade zones and maquiladoras, will be considered related parties of a resident in Paraguay.
Transfer Pricing Studies Preparation
Currently, the filing process has not been specified yet, which is pending for the SET to textually define who must file a declaration, in addition to the formats and means of filing.
Source: Subsecretaría de Estado de Tributación (SET)
