On October 15, 2021, the Official Gazette of Paraguay published Decree No. 6105, which amends some articles of the Annex of Decree No. 3182/2019, regulating the Corporate Income Tax (IRE – Impuesto a la Renta Empresarial) established in Law No. 6380/2019 to modernize and simplify the national tax system and some articles of Decree No. 4644/2020 on special rules to value operations.
1. IRE amendments
According to Article 5 of Decree No. 3182/2019, the UPC (Unidad Productiva Conjunta – Joint Productive Unit (UPC), which constitutes an economic unit coordinated through single management using the biological asset and the land totally or partially dedicated to agricultural, livestock, or forestry production, regardless of the size, title, or legal form shall be considered as IRE taxpayer in numeral 8 of Article 2 of the Law.
When the personal or real property in a condominium generates taxable income by leasing thereof, it will also be considered as a UPC for tax purposes.
2. Containers – Tax effects
For tax purposes, current assets are those containers sold with the product inside, consumed or exhausted through use or discarded after use or consumption of the product they contain.
3. Year of useful life and residual value
According to Article 31 of Decree No. 3182/2019, the depreciation charge for wear and tear, impairment, or obsolescence will be applied to the value of fixed assets, including biological assets under the years of useful life minus the percentage of residual value.
4. Write-Off of inventories and fixed assets
In the cases of decomposition or obsolescence of exchange goods or fixed assets to be accepted as a loss, the following must be complied with: When the taxpayer is obliged to keep accounting records with an external auditor’s opinion, the external auditor will be responsible for verifying the detail of the affected assets to be written off, being obliged to report in its annual opinion.
In all other cases, the act will be certified by the taxpayer’s accountant, and the pertinent minutes will be signed.
5. Amendment to decree 4644/2020
According to the new article 24 of the aforementioned Decree, IRE taxpayers may register the purchase and sale contracts related to the goods affected by numeral 7 of article 38 of the law to establish a date to determine the price of the operation, different from the date of the fulfillment of the shipment, and they will be opposable to the Tax Administration as long as they are registered within 15 working days of the month following the month in which they were executed.
6. Transitory provision
Contracts entered into before the implementation of the Register of Purchase and Sale Contracts, corresponding to exports made as of July 1, 2021, of goods covered by number 7 of article 38 of the Law, may be registered until December 31, 2021.
Source: La Gaceta 18/10/21