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Paraguay extends again reduced VAT on tourism and related services

Ongoing COVID-19 crisis means more support for hard-hit entertainment and hotels sectors

Paraguay has rolled over for a second time the reduced Value Added Tax rates on tourism, catering, accommodation, tourist transport, tourist guide and event organization services. This will now be extended until 31 March 2022. The plan had been to run the tax rate subside between August 2020 and June 2021.

The plan was originally introduced in August 2020, at the height of the pandemic, and was due to expire in June 2021. It was extended for the first time to 31 December 2021.

The current VAT rate in Paraguay is 10%.  The Paraguayan reduction cuts this in half to 5% by only subjecting 50% of the supply to VAT.

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