Limitation periods in Paraguay: civil, commercial, labour and tax claims, and how to stop the clock

1. Civil and commercial periods. Extinctive prescription runs from when the right becomes enforceable; for interest bearing obligations the capital prescribes from the last interest payment. Periods: 10 years for rights recognized by final judgment (including settlements and claims verified in insolvency) and for all personal actions without another period; 5 years for rent, periodic interest and similar periodic amounts, rights between partners and with the company, and creditors' claims against directors; 4 years for endorsable or bearer instruments, from issue for sight instruments and from maturity otherwise, unless special laws differ; 3 years for current account contracts and merchants' claims for goods sold; 2 years for annulment for error, fraud or duress, the creditors' revocatory action (and in any case 5 years from the act), professional fees of lawyers, notaries, engineers, experts and other liberal professions, merchants' sales to non merchants, civil liability for unlawful acts (torts), and simulation; 1 year for hotels, schools, auctioneers, commission agents and brokers, transport (18 months if it began or ended abroad) and insurance; 6 months for undisclosed encumbrances; and 3 months for redhibitory defects. Annulment of void acts does not prescribe. A future prescription cannot be waived and parties cannot agree a different period.
Cost to do it: Missing a period costs the whole claim; there is no fee to interrupt it beyond serving a claim or obtaining an acknowledgment.
Example: An exporter's invoice of PYG 293,415,500 to a Paraguayan trading company for goods sold prescribes in 3 years; to a consumer, in 2 years. / A US$50,000 (PYG 293,415,500) promissory note maturing on 30 September 2026 prescribes on 30 September 2030 under the 4 year rule.Ley Nº 1183/1985, Código Civil, Art. 635, 636, 640, 658, 659, 660, 661, 662, 663, 664, 666, 667 and 668, 1985-12-18 official text · verified 2026-10-28

2. Suspension and interruption. Prescription is interrupted by a claim served on the debtor, even before an incompetent judge; by filing the credit in an estate or creditors' meeting proceeding; by any unequivocal judicial or extrajudicial act acknowledging the debt; and, under the Civil Code, by a notarized submission to arbitration. Under the 2025 arbitration law, notice of the request for arbitration to the other party, or its filing with the agreed institution, interrupts prescription unless the tribunal is never constituted for reasons attributable to the claimant. Interruption by a claim is treated as not having occurred if the claimant withdraws, the case lapses or the defendant is acquitted, but a new claim within 6 months of a judgment not on the merits preserves it. A new full period runs after interruption. Prescription is suspended for incapable persons without a representative, between spouses and in other family relationships, and a judge may relieve a creditor prevented by force majeure who acts immediately afterwards. Prescription runs for and against the State and public entities.
Cost to do it: Serving a claim requires filing fees and counsel; a signed acknowledgment of debt from the debtor is the cheapest interruption.
Example: A creditor whose 3 year period on a PYG 293,415,500 sale ends on 31 December 2026 obtains the buyer's signed acknowledgment on 15 December 2026; a new 3 year period starts. / A US$1,000,000 (PYG 5,868,310,000) claim subject to arbitration is protected once the request reaches the respondent (Ley 7561 art. 32).Ley Nº 1183/1985, Código Civil; Ley Nº 7561/2025, De Arbitraje, CC art. 641, 642, 643, 644, 647, 648, 649 and 655; Ley 7561 art. 32, 1985-12-18 official text · verified 2026-10-28

3. Labour claims. Actions under the Labour Code or derived from individual or collective employment contracts prescribe in 1 year from when they arise. Actions prescribe in 60 days for annulment of an employment contract for error or intimidation, termination of a contract for legal cause, payment for lack of statutory notice (from dismissal) and compensation for unjustified dismissal or for unjustified resignation (from separation). An employer that does not act within 30 days of learning of a just cause for dismissal loses the right. Prescription is interrupted by filing a claim, by acknowledgment, by duly proven force majeure and by private settlement negotiations, and non working days are counted. These articles are not among those amended by Ley 496/1995.
Cost to do it: Labour claims are heard by labour courts, not arbitration (Ley 7561/2025 art. 2).
Example: A manager dismissed on 1 October 2026 must claim severance and notice pay by 30 November 2026 (60 days). / A severance claim worth US$20,000 (PYG 117,366,200) is lost if not filed within 60 days of the dismissal.Ley Nº 213/1993, Código del Trabajo, Art. 399, 400, 401, 404 and 405, 1993-06-29 official text · verified 2026-10-28

4. Tax claims. The State's action to collect taxes prescribes in 5 years from 1 January of the year after the obligation should have been met; for annual income taxes the taxable event occurs at the fiscal year end. Penalties, interest and surcharges follow the same period, counted for fraud and contravention penalties from 1 January after the infringement. The period is interrupted by a final inspection record, by an assessment once notified or by filing a return, by acknowledgment, part payment, a request for payment facilities, or collection proceedings notified to the debtor; it is suspended by the taxpayer's administrative or judicial appeals until a final decision. Amounts paid on prescribed tax cannot be reclaimed.
Cost to do it: No direct cost; filing an appeal suspends prescription, extending exposure.
Example: Corporate income tax for fiscal year 2025 (closing 31 December 2025) prescribes on 31 December 2030, counting 5 years from 1 January 2026. / A US$50,000 tax adjustment for 2025 can be assessed until the end of 2030 unless the period is interrupted.Ley Nº 125/1991, establishes the new tax regime, Art. 164, 165, 166 and 167, 1991-12-18 official text · verified 2026-10-28