The National Congress has sanctioned and submitted to the Executive Branch for publication the bill “Establishing the National Policy for the Production and Assembly of Electrical, Electronic, Electromechanical, and Digital Equipment.” This regulation represents a decisive step towards attracting investments and boosting the technology industry in Paraguay, with unprecedented tax benefits and clear rules of application.
Key aspects of the law
- Tax benefits: Exemption from tariffs on the import of capital goods, materials, and supplies. Reduced taxable base for VAT on import and commercialization (15% and 45% respectively).
- Conditions for access: Increased national production, generation of formal employment, and at least 20% of national added value.
- Term of validity: The incentives are granted for 20 years, renewable.
- Control and monitoring: The Ministry of Industry and Commerce, together with the MEF, will be in charge of monitoring and supervision.
Fiscal implications of the new regulations
From a fiscal point of view, the law generates a new special regime that must be coordinated with Law N° 6380/2019 and with the new Investment Incentive Regime, a regulation that was approved with the bill under analysis and that is currently ready for publication.
Three elements stand out that potential beneficiaries should consider:
- Compatibility of benefits: Not all regimes can be accumulated.
- Permanence requirements: Non-compliance may lead to the revocation and return of the exempted taxes.
- Strategic planning: The design of investment projects must contemplate the tax, financial, and labor impact.
Impact on the business sector
This law represents an opportunity for manufacturers and assemblers of technological equipment, as it allows the reduction of costs in import and commercialization, which increases competitiveness in the face of international markets.
At BKM | Berkemeyer, we have a multidisciplinary team of tax attorneys and corporate advisors ready to assist your company in the design, presentation, and management of investment projects under this new regime.
For more information, please contact Luciano Antonelli: luciano.antonelli@berke.com.py
