Casos Especiales Del IVA: Venta de Bienes Usados y Alquiler de Muebles y Otros
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Cosmetic Elhen GLCasos Especiales Del IVA: Venta de Bienes Usados y Alquiler de Muebles y Otros
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Cosmetic Elhen GLCommon questions
Con tecnología de IAIn Paraguay, if a company transfers titles of credit at a price above their nominal value, the difference between the sale price and the nominal value constitutes taxable income under the Income Tax (IRACIS). This differential is considered as gross income and is subject to IRACIS as it represents an increase in heritage through commercial activities .
Self-invoices cannot be used in Paraguay when a vehicle is delivered as part of the payment because the selling company must document the entire transaction through a formal invoice. This ensures that all parts of the transaction, including any involved VAT, are properly recorded and reported without the simplification of self-invoicing, to adhere to legal documentation requirements .
When a business in Paraguay purchases a used vehicle from a non-taxpayer, it must issue a 'self-invoice' (autofactura) to document the acquisition. This self-invoice serves as the tax document, and upon resale, the vehicle will be subject to VAT on a reduced taxable base of 30% .
In Paraguayan law, the tax treatment of a transaction is influenced by whether the ancillary aspects ('accessory') of a contract follow the primary concept ('principal'). The main concept of a transaction dictates its tax status, meaning that if the rental of a good is the principal aspect, any related service fees or secondary items will be treated according to the dominant item, affecting the overall VAT rate applied .
The VAT rate for furniture rental in Paraguay is determined by whether the transaction is considered a 'service of rental' or 'leasing use of goods'. If it's a contract for cession of use, a 5% VAT applies, whereas more comprehensive services involving furniture are taxed at 10% . The nature of the transaction is assessed by factors like the contract's intent and the significance of rental versus service aspects .
A vehicle is sold with a reduced VAT rate of 3% if the seller did not utilize the fiscal credit when the vehicle was acquired. In this case, the sale to a vehicle trading platform does not involve a self-invoice, and the transaction is documented as exempt in the Exenta section .
For importing used vehicles in Paraguay, the rule applied is that 70% of the transaction is exempt from VAT and 30% is taxed. There are disputes regarding the VAT rate and use of credit, with some interpretations suggesting a full 100% credit can be applied, although the Paraguayan tax authority (SET) suggests prorating credits. The controversy highlights discrepancies in the application of VAT and the extent of deductible credits on such imports .
A Paraguayan IVA taxpayer exchanging a used vehicle at a dealership must extend a proper invoice rather than a self-invoice. This requirement is because those providing personal services, like lawyers, are considered IVA contributors and must document the transaction with a proper invoice if the fiscal credit was not initially applied .
Law 2421/04 introduced changes allowing professionals who provide personal services to deduct the VAT credit for the purchase of automobiles up to a limit of G. 100,000,000, equating to a G. 10,000,000 VAT credit . Before this law, the deduction was not possible for personal services providers like lawyers or engineers .
The sale of used goods acquired from non-contributors of the VAT is documented by issuing a self-invoice ('autofactura'). The VAT applied uses a reduced base: 30% of the sale price without including VAT, which implies a direct effective rate of 3% .
