Countries › Paraguay › Guide › 6. Taxes › Digital services taxation in Paraguay: IVA and non resident income tax collected through banks and card issuers

Digital services taxation in Paraguay: IVA and non resident income tax collected through banks and card issuers

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Last verified: 2026-10-28 · Status: Stable

Paraguay taxes digital services supplied from abroad twice: 10 percent IVA on the price and the non resident income tax (INR) at 15 percent on a 30 percent deemed net, an effective 4.5 percent. A service counts as used in Paraguay if the customer's IP address, SIM, billing address, bank account or card issuer is Paraguayan, and both taxes are mainly collected by the banks, card processors and other intermediaries that handle the payment. Paraguayan businesses buying digital services from abroad must withhold INR themselves whatever the payment method.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (planilla de cotizaciones of that day). Conversions are for orientation only.

Key facts

IVA on digital services used in Paraguay	10 %Ley 6380/2019 art. 84 num. 5 and 90, as of 2026-10-28 · in force
Effective INR on digital services from abroad (15 percent on 30 percent)	4.5 %Ley 6380/2019 art. 73 num. 12, 75 num. 1 f) and 76, as of 2026-10-28 · in force
INR withholding by card intermediaries on digital services applies from	2022-01-01 dateDecreto 5373/2021 art. 1, as of 2026-10-28 · in force

The rule

1. IVA. Digital services are services made available online through internet based technology that are essentially automated. They are deemed rendered in Paraguay when used there, judged by any one of: the customer's device IP address or SIM country code, billing address, bank account used for payment, billing address held by the bank, or the issuer of the card used. The base is the price, and when payment goes through banks, financial entities, exchange houses, cooperatives, payment processors or similar, they must calculate and collect the IVA.
Cost to do it: 10 percent of the price, collected at payment.
Example: A subscription billed at PYG 100,000 to a Paraguayan card carries IVA of PYG 10,000. / A US$15 subscription carries US$1.50 of IVA.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 81 num. 2 i), 84 num. 5, 85 num. 6, 90 and 97, 2019-09-25 official text · verified 2026-10-28

2. INR. Digital services, including entertainment and gaming, used in Paraguay are Paraguayan source income for INR regardless of who provides them or whether linked to taxable activity, under the same location tests. The deemed net income is 30 percent of gross, so the 15 percent INR equals 4.5 percent of the payment. The administration can designate card processors and other intermediaries as withholding agents.
Cost to do it: Effective 4.5 percent of the payment.
Example: Payments of PYG 1,000,000,000 a year to a foreign SaaS provider bear INR of PYG 45,000,000. / On US$170,407 of SaaS fees the INR is US$7,668.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 73 num. 12, 75 num. 1 f), 76 and 77, 2019-09-25 official text · verified 2026-10-28

3. Who withholds INR in practice. The regulation designated banks, financial entities, exchange houses, cooperatives, payment processors, phone companies and similar intermediaries as INR withholding agents on digital services from 1 July 2020; Decreto 5373/2021 postponed that obligation to 1 January 2022 where the user pays by credit or debit card, and confirmed that IRE taxpayers buying digital services from foreign providers must withhold INR whatever the payment method.
Cost to do it: Businesses paying by wire must self withhold.
Example: A Paraguayan company paying a cloud provider by bank transfer withholds the INR itself. / A consumer paying by card has the INR withheld by the card issuer.Decreto Nº 5373/2021 (postpones INR withholding by intermediaries on digital services; regulates Decreto 3181/2019), Art. 1 and 2, 2021-05-31 official text · verified 2026-10-28

Tax	Base	Rate	Amount
IVA	Price	10%	US$100
INR	30% of price	15%	US$45
Total			US$145

Tax on US$1,000 of digital services from abroad (Ley 6380/2019)

Worked example

A Paraguayan company subscribes to a US cloud platform for US$10,000 (PYG 58,683,100) a month, paid by wire.
INR: it withholds 4.5 percent, US$450 (PYG 2,640,740), and files it with the DNIT.
IVA: 10 percent, US$1,000; the law lets the DNIT require IVA withholding on services by INR taxpayers (art. 97), and IVA withheld from foreign providers is creditable (art. 88 num. 3).
If paid by a Paraguayan corporate card, the card issuer collects the IVA and INR instead.

Step by step

List all foreign digital subscriptions and how each is paid.
For wire payments, withhold INR at 4.5 percent and account for IVA.
For card payments, reconcile the IVA and INR charged by the bank with the invoices.
Keep provider invoices to support IRE deductions; payments abroad without INR are capped at 1 percent of gross income.

Common traps

The location tests are alternative: any one Paraguayan connection is enough (art. 84 num. 5).
Missing INR withholding also caps the IRE deduction at 1 percent of gross income (art. 15 num. 18).

Sources

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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