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Countries › Paraguay › Guide › 6. Taxes › Tax audits, penalties and disputes in Paraguay: five year limitation, fines, appeals and binding rulings

Tax audits, penalties and disputes in Paraguay: five year limitation, fines, appeals and binding rulings

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

The DNIT can assess taxes for five years from 1 January after the due date. Late payment costs a fine of 4 to 14 percent plus monthly interest, underpayment up to 50 percent, and fraud one to three times the tax. Assessments follow a written procedure with a 10 day reply period and up to 15 days for evidence; the taxpayer can then seek reconsideration within 10 business days, appeal, and go to the Tribunal de Cuentas within 15 days. Binding rulings are answered within 90 days, and in 2025 the DNIT reported closing 327 penalty proceedings, about 90 percent within four months.

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

Statute of limitations for tax collection5 yearsLey 125/1991 art. 164, as of 2026-10-28 · in force
Minimum late payment (mora) fine, before interest4 %Ley 125/1991 art. 171, as of 2026-10-28 · in force
Maximum late payment (mora) fine, before interest14 %Ley 125/1991 art. 171, as of 2026-10-28 · in force
Maximum fine for underpayment (omisión de pago), share of omitted tax50 %Ley 125/1991 art. 177, as of 2026-10-28 · in force
Fraud fine range, times the tax evaded1 to 3 timesLey 125/1991 art. 175, as of 2026-10-28 · in force
Deadline to file reconsideration10 business daysLey 125/1991 art. 234, as of 2026-10-28 · in force
Deadline to sue in the Tribunal de Cuentas15 daysLey 125/1991 art. 237, as of 2026-10-28 · in force
Deadline for the administration to answer a binding ruling request90 daysLey 125/1991 art. 243, as of 2026-10-28 · in force

The rule

1. Limitation. The right to collect taxes prescribes after five years from 1 January of the year after the obligation became due. It is interrupted by, among other things, a signed final audit report or determination, acknowledgement of the debt, a payment plan request or a claim, and suspended by administrative or judicial petitions or appeals.
Cost to do it: Keep records for at least five years after the due year (also Ley 6380 art. 22).
Example: IRE for 2026, due in 2027, prescribes on 1 January 2033 unless interrupted. / Same five year window applies to customs duties (Código Aduanero art. 282).Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 164, 165 and 166, 1991-12-18 official text · verified 2026-10-28
2. Late payment. Late payment is fined 4 percent of the unpaid tax if up to one month late, 6, 8, 10 and 12 percent for up to two to five months, and 14 percent after five months, plus monthly interest calculated daily at a rate set by the Executive every four months, capped at the bank discount rate plus 50 percent. Payment plans can be granted, but never for taxes withheld or collected by agents.
Cost to do it: Fine 4 to 14 percent plus interest.
Example: Tax of PYG 100,000,000 paid three months late: fine PYG 8,000,000 plus interest. / Tax of US$17,041 three months late: fine US$1,363 plus interest.Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 161 and 171, 1991-12-18 official text · verified 2026-10-28
3. Penalties. Underpayment not amounting to fraud is fined up to 50 percent of the omitted tax. Fraud, an intentional act to obtain an undue benefit, is fined one to three times the tax evaded, and fraud is presumed in listed cases, including withholding agents who pay withheld tax more than 30 days late and missing books or invoices. Breaches of formal duties are fined PYG 50,000 to 1,000,000, amounts the Executive updates yearly for inflation. Fines accumulate with late payment charges, and companies can be fined without identifying an individual.
Cost to do it: Up to 300 percent of the tax for fraud.
Example: Evaded tax of PYG 100,000,000: fraud fine PYG 100,000,000 to PYG 300,000,000. / Evaded tax of US$17,041: fine US$17,041 to US$51,122.Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 172 to 181, 1991-12-18 official text · verified 2026-10-28
4. Assessment procedure. An official report sets out the alleged debt; the taxpayer gets 10 days, extendable once, to access the file, reply and offer evidence; an evidence period of up to 15 days, extendable, may follow; then a reasoned decision. The administration must decide within 10 days after the matter is ready, otherwise silence is a tacit denial. The same structure applies to imposing penalties other than late payment fines. Precautionary measures need a court order.
Cost to do it: Professional fees for the defence; no filing fee in Ley 125.
Example: A taxpayer accepting the findings can file amended returns within the 10 day period and close the case. / Accepting the charges leads to an immediate decision.Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 205, 212, 225 and 226 to 228, 1991-12-18 official text · verified 2026-10-28
5. Appeals. Reconsideration must be filed within 10 business days of notification with the body that issued the decision, which has 20 days to decide (silence is denial); it is mandatory before appeal and suspends enforcement. The appeal (apelación or alzada) is filed within 10 business days and the text of art. 235 sends it to the Ministry of Finance's Consejo de Tributación, with 30 business days to decide. Against the final administrative decision, a contentious administrative action lies with the Tribunal de Cuentas within 15 days.
Cost to do it: Court fees and lawyer fees apply in the Tribunal de Cuentas stage.
Example: A determination notified on 2 March must be challenged by reconsideration within 10 business days. / Enforcement is suspended while reconsideration and appeal are pending.Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 233, 234, 235 and 237, 1991-12-18 official text · verified 2026-10-28
6. Binding rulings. Anyone with a personal and direct interest can ask the tax administration how the law applies to a concrete situation; the office must answer within 90 days and the answer binds it for the consultant until a change is notified, which applies only to later facts. If no answer comes and the consultant applied its reasoned opinion, only interest can be charged provided the query was filed at least 90 days before the due date.
Cost to do it: No fee in Ley 125.
Example: File a ruling request on a new structure at least 90 days before the first payment date. / Protects against penalties if the DNIT does not answer in time.Ley Nº 125/1991 Que establece el nuevo régimen tributario (Libro V, kept in force by Ley 6380 art. 153), Art. 241 to 245, 1991-12-18 official text · verified 2026-10-28
7. Enforcement reality. The DNIT reported that in fiscal year 2025 its legal directorate closed 327 administrative penalty proceedings, recovering more than PYG 221,000 million, with about 90 percent concluded within four months, and that its large taxpayers directorate carried out 203 targeted audits in 2025, recovering more than PYG 47,000 million mostly through voluntary regularisation.
Cost to do it: Voluntary regularisation during an audit avoids the full penalty procedure.
Example: PYG 221,000 million recovered from 327 proceedings, about PYG 675,840,979 each on average. / About US$37,659,905 recovered from penalty proceedings in 2025.DNIT institutional reports (news releases of 5 and 13 January 2026), Not applicable (official statistics), 2026-01-13 official text · verified 2026-10-28
DelayFine on unpaid taxOn PYG 100,000,000USD
Up to 1 month4%4,000,000US$682
Up to 2 months6%6,000,000US$1,022
Up to 3 months8%8,000,000US$1,363
Up to 4 months10%10,000,000US$1,704
Up to 5 months12%12,000,000US$2,045
Five months or more14%14,000,000US$2,386

Late payment fine scale (Ley 125/1991 art. 171), plus interest

Worked example

  • An audit finds IRE underpaid by PYG 100,000,000 (US$17,041) for 2024, due in April 2025, assessed in October 2026.
  • Late payment fine at 14 percent (over five months): PYG 14,000,000 (US$2,386), plus daily interest.
  • If treated as omission: fine up to PYG 50,000,000 (US$8,520); if fraud: PYG 100,000,000 to PYG 300,000,000.
  • The company files reconsideration within 10 business days, which suspends enforcement, and can then appeal and sue in the Tribunal de Cuentas.

Step by step

  1. Keep books, invoices and withholding receipts for at least five years.
  2. Remit withheld taxes on time: more than 30 days late is presumed fraud and withheld tax cannot be put on a payment plan.
  3. On receiving an audit report, use the 10 day reply window (extendable once) to file evidence or amend returns.
  4. Calendar the 10 business day reconsideration deadline from notification, then the appeal and the 15 day court deadline.
  5. For uncertain positions, file a binding ruling request at least 90 days before the due date.

Common traps

  • Withholding agents cannot get payment plans for tax they withheld (art. 161).
  • Silence is a denial: deadlines run from the end of the decision period, not from a later answer (art. 205, 234 and 235).
  • Ley 125 art. 235 still names the Ministry of Finance's Consejo de Tributación; since Ley 7143/2023 the DNIT is an autonomous body, so confirm the current appellate body with the DNIT before filing.
  • The fixed fine amounts in PYG are updated yearly for inflation (art. 179).

Sources

Related pages

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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