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Daily Tax Report: International

Paraguay Postpones Start of Digital Services Tax by Six Months

May 22, 2020, 5:52 PM

Paraguay will delay by six months the implementation of a new tax on digital services, including Netflix Inc., Spotify Technology SA, and Uber Technologies Inc.

The delay “aims to support the economy due to the Covid-19 emergency,” Deputy Tax Minister Oscar Orue tweeted late Thursday.

Legislation approved last year created a new tax on non-residents under which entities not domiciled in Paraguay will be charged 15% of revenue generated in the country. The law, which was slated to take effect on July 1, targets services provided by foreign online platforms.

Orue told local media that a decree implementing the delay until January 2021 would be published next week.

In recent weeks, companies including Netflix and Sony have announced price increases for their streaming and gaming services to clients in Chile and Mexico as governments there extended value-added tax to online services.

Check out Bloomberg Tax’s country-by-country roadmaps covering direct and indirect tax developments.

To contact the reporter on this story: Tom Azzopardi in Santiago at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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