On 7 April 2022, the tax authority of Paraguay has issued General Resolution No. 115/2022, which provides detailed rules on the preparation and submission of the transfer pricing (TP) reporting requirements as per Law No. 6380/2019 and regulated by Decree No. 4644/2020 and eliminates the conflict-of-interest provision established by General Resolution No. 108/21 under which the same professional may not provide both TP documentation and auditing services to the same taxpayer in the same tax year.
The Law No. 6380/19 established TP rules as part of a major tax reform in Paraguay, entered into force on 1 January 2021 and the first TP report due in 2022 for the tax year ending on 31 December 2021.
Requirement to submit TP Report
According to General Resolution No. 115/2022, the following taxpayers are required to prepare and submit a transfer pricing report:
- Taxpayers with gross income exceeding PYG 10 billion in the previous year that enter into operations with non-resident related parties or with resident related parties if the transaction for one of the parties is exempt or otherwise not subject to tax; and
- Taxpayers that carry out operations with non-residents in countries or jurisdictions with low or no taxation or with users of free zones or maquiladora companies, unless it is proven that the other party is not related.
Reporting deadline
For tax years ending 30 April, 30 June or 31 December 2021, the TP report is due on 31 October 2022. For tax years ending 30 April, 30 June or 31 December 2022 onwards, taxpayers must file the TP report in the seventh month after the company’s tax year ends. General Resolution No. 115/22 entered into force on 8 April 2022 and applies to tax year 2021 and onwards.
