Paraguay Tax Agency Releases Binding Consultation Clarifying VAT on Digital Call Center Services for Nonresidents

The Paraguayan State Undersecretariat of Taxation Aug. 23 issued Binding Consultation No. 392, clarifying the application of VAT to the provision of digital call center services to nonresidents. The taxpayer sought a declaration that VAT didn’t apply to digital call center services it provided through information technology (IT) means to nonresident customers. The Tax Agency responded that: 1) under the Tax Law, digital services are considered provided in Paraguay and taxable, if effectively used or exploited there, and if the data is located there; 2) the taxpayer wasn’t linked to its customers’ internet protocol (IP) addresses, subscriber identity module (SIM) ...