The 2012 worldwide VAT, GST and sales tax guide

508 P ARAGUAY
Imported goods. The time of supply for imported goods is either
the date of importation or the date on which the goods leave a
duty suspension regime.
F. Recovery of VAT by taxable persons
In certain circumstances, a taxable person may recover input tax
(credit VAT), which is VAT charged on goods and services supplied
to it for business purposes. A taxable person generally recovers
input tax by deducting it from output tax (debit VAT), which
is VAT charged on supplies made.
Input tax includes VAT charged on goods and services supplied
in or from Paraguay and VAT paid on imports of goods.
A valid tax invoice or customs document must generally support
an input tax credit.
Nondeductible input tax. Input tax may not be recovered on purchases
of goods and services that are not used for making taxable
supplies or that are used for nonbusiness purposes (for example,
goods acquired for private use by an entrepreneur). In addition,
input tax may not be recovered for some items of business expenditure.
The following tables provide examples of items of expenditure
for which input tax is not deductible and examples of items for
which input tax is deductible if the expenditure is related to a
taxable business use (these lists are not exhaustive).
Examples of items for which input tax is nondeductible
Business gifts
Business use of home telephone
Private use of business assets
Examples of items for which input tax is deductible
(if related to a taxable business use)
Purchase, lease and hire of cars, vans and trucks, as well as fuel
and maintenance charges
Parking
Taxis
Travel expenses
Conferences and seminars
Mobile telephones
Advertising and sponsorship
Refunds. If the amount of input VAT (credit VAT) recoverable in
a month exceeds the amount of output VAT (debit VAT) payable,
the excess credit may be carried forward to offset output tax in
the following tax period.
Overpayments of VAT. If a VAT taxpayer has paid too much VAT
or has paid VAT in error, it may correct the return form and use
the overpayment to offset output VAT in the following tax period.
G. Recovery of VAT by nonestablished businesses
Paraguay does not refund VAT incurred by foreign businesses
unless the foreign businesses have a permanent establishment
and are registered for VAT in Paraguay.