Paraguay: local rules

Paraguay's transfer pricing rules are in articles 35 to 39 of Law 6380 of 2019 (Chapter III, Title I, Book I). They are detailed in Decreto 4644 of 2020 (changed by Decreto 6105 of 2021 and Decreto 7402 of 2022) and in DNIT general resolutions (RG 86/2021, 96/2021, 108/2021, 115/2022 and 127/2023). Corporate income tax (IRE) payers must set income and deductions at arm's length in dealings with related parties abroad, or with related parties in Paraguay when the deal is exempt or outside the IRE for one side (art. 35). Parties are related when one holds more than 50% of the voting capital of the other or can steer its management or control (art. 37). Dealings with residents of low or no tax jurisdictions, free zone users and maquila companies are presumed to be related party dealings unless the taxpayer proves otherwise. A low tax jurisdiction is one that taxes at a lower effective rate than Paraguay and has no exchange of information treaty in force (Decreto 4644 art. 5, as changed in 2022). The rules took effect for transactions from 1 January 2021. A price adjustment counts as Paraguayan source income taxed at the IRE rate (Decreto 4644 art. 30), which is 10% (Law 6380 art. 21).

There is one annual filing, the Estudio Técnico de Precios de Transferencia (ETPT, a transfer pricing technical study). It is due from IRE payers with related party dealings whose gross income in the prior year was above G. 10,000 million, and from any IRE payer that deals with low tax jurisdictions, free zone users or maquila companies, whatever its size (Law 6380 art. 39, RG 115/2022 art. 2). Companies in the SIMPLE or RESIMPLE regimes are excused. The study covers the group (structure, business, functions, policies), the local entity, each related party deal, the functional analysis, the method, the comparables and the conclusion, so it combines local file and master file content (RG 115 art. 3). It is filed as a PDF with Excel working papers through the Marangatu system, and an Authorized Transfer Pricing Professional (PAPT) must ratify it. A taxpayer with no controlled deals still files a nil study. The study counts as a sworn declaration, and the taxpayer must also ask the DNIT to add the obligation 957-ETPT to its RUC within 30 business days after year end. Records must be kept for the five year limitation period. Taxpayers that want to rebut the related party presumption for low tax or free zone counterparties file a separate notice with proof (RG 96/2021 art. 4, RG 115 art. 12). Exporters of soy, soy products, corn, rice and wheat to related parties also file a DJI-Num 7 return and register their sales contracts (RG 86/2021).

Law 6380 art. 38 lists six methods: comparable uncontrolled price, resale price, cost plus, profit split, residual profit split and transactional net margin. Comparable uncontrolled price comes first, and the others may be used when it is not appropriate. With two or more comparables, the taxpayer builds a range with statistical methods, and the regulations use the interquartile range and the median (Decreto 4644 art. 11). A result inside the range is accepted. A result outside the range that lowers the IRE base is moved to the median. Internal comparables are preferred to external ones (Decreto 4644 art. 9). For goods with a public international quotation, art. 38 numeral 7 sets a special rule: export prices must be adjusted to the quoted price on the shipment date, or the day before. Decreto 4644 applies it to soy, soy derivatives (oils, meals, pellets, expellers), corn, rice and wheat, from 1 July 2021. The reference price is a FOB price at a Paraguayan port from the Buenos Aires grain exchange or CEPEA, and sales contracts must be registered with the DNIT (RG 86/2021). The OECD Guidelines are not named in the law.

RG 115/2022 art. 13 treats formal failures as contraventions under art. 176 of Law 125/1991. A late ETPT, an ETPT with wrong data, and not keeping the support records are each fined at the maximum contravention fine the Executive Branch has set at the due date. A late rebuttal notice and a late DJI-Num 7 each cost a fixed G. 900,000. Art. 176 itself sets a range of G. 50,000 to G. 1,000,000, and art. 179 lets the Executive update fixed fines every year with inflation, so the current maximum is higher and was not confirmed. If the DNIT adjusts a price and tax is underpaid, an omission fine of up to 50% of the tax omitted can apply (art. 177). Fraud is fined at one to three times the tax (art. 175). Late tax payments carry a fine of 4% to 14% of the unpaid tax plus daily interest (art. 171). The DNIT can collect tax for five years (art. 164).

Paraguay has not enacted Pillar Two as far as could be confirmed on 27 October 2026. No income inclusion rule, undertaxed profits rule, qualified domestic minimum top-up tax or GloBE information return was found in the DNIT rules, and no official government statement or bill was found. There is no Pillar Two filing deadline for Paraguay. Paraguay is a member of the OECD/G20 Inclusive Framework on BEPS, but that does not create a tax. Adviser articles say the question is open because Paraguay's tax incentive regimes lead to low effective rates.

Paraguay has no country-by-country report. The OECD peer review of September 2024 says Paraguay has not introduced a CbC filing requirement and has no exchange relationships for CbC reports, and the 2025 review still lists Paraguay as needing to put a framework in place. The ETPT only asks whether the group files a CbC report elsewhere and who files it (RG 115 art. 7). The tax year is the calendar year (Decreto 3182/2019 annex art. 15), but sugar mills and cooperatives that process farm products may choose 30 April, and insurers, beer and soft drink makers may choose 30 June. The option cannot be changed for five years. The IRE General Regime return (Form 500) is due in the fourth month after year end, on a day set by the last digit of the RUC (the tax number without the check digit). The DNIT replaced the SET (Subsecretaría de Estado de Tributación) under Law 7143/2023. If a deadline falls on a non-working day it moves to the next working day (RG 38/2020 art. 3 and the DNIT calendars). The holidays law (Law 7544/2025) adds 20 June, lets the Executive move 1 March, 12 June, 20 June and 29 September to a Monday and add up to three holidays a year by decree, and also moves a deadline that falls on a public sector day off (asueto) to the next working day (art. 7).