Transfer pricing
Transfer pricing in Paraguay: a guide for companies with related-party transactions
· By Rodrigo D. Ruiz-Diaz Perrier
If your company invoices between a parent and a subsidiary, or buys/sells to related parties inside or outside Paraguay, you likely need to comply with the transfer pricing regime. Here is the essential guide.
What is transfer pricing?
These are the rules requiring that transactions between related parties (a Spanish parent company and its Paraguayan subsidiary, for example) be agreed at market value, as if they were independent companies. The goal, just as in Spain or any OECD-aligned country, is to prevent a group from artificially shifting profits to the lower-tax jurisdiction.
Legal framework in Paraguay
The legal basis is Law No. 6,380/2019 (articles 38 and 39, within the chapter on special valuation rules), regulated by Decree No. 4,644/2020 and developed technically through a series of DNIT General Resolutions (86/21, 96/21, 108/21, 110/21 and, the most cited, 115/2022, which governs the Transfer Pricing Technical Study and its accompanying reports).
Who must file the Technical Study (ETPT)?
In general terms, it must be filed by IRE (corporate income tax) taxpayers carrying out transactions with related parties abroad, when those transactions benefit from some tax relief or exemption and the previous year's income exceeded PYG 10,000,000,000 (roughly USD 1.3-1.4 million, depending on the exchange rate at the time). It also applies, with a presumption of related-party status unless proven otherwise, to transactions with entities in low- or no-tax jurisdictions (BONT), free-trade-zone users and maquila companies. Taxpayers under the IRE SIMPLE/RESIMPLE regime, among others, are excluded.
Accepted methods and the Technical Study (ETPT)
The law accepts the internationally recognised OECD methods (comparable uncontrolled price, cost plus, resale price, among others) plus a specific method for exports with an internationally quoted price (commodities). The ETPT is the technical document — including a comparability analysis — that demonstrates the prices agreed with related parties are at market value. It must be filed in PDF together with Excel/ODS working papers showing the calculation formulas, through the Marangatú system, and can only be signed by a professional registered with the DNIT's Register of Authorised Professionals.
Filing deadlines
The deadline depends on the company's fiscal year-end: year-end on 31 December → filed in July of the following year; year-end on 30 April → in November of the same year; year-end on 30 June → in January of the following year. In addition to the ETPT, the DNIT requires an Informative Sworn Statement (DJI) with a qualitative and quantitative summary of the related-party transactions.
Why this matters to a Spanish investor or company
If you have a parent company in Spain with a subsidiary, branch or even a structure under the maquila regime in Paraguay, any intra-group flow (management fees, loans, purchase or sale of inputs or services) can fall under this regime. Failing to comply exposes the company to ex officio adjustments by the DNIT and to fines. The practical recommendation is the same as for every other Paraguayan tax topic: work from the start with a professional registered with the DNIT who understands both the local rules and the reality of your group in Spain, to avoid surprises on the first filing.
Frequently asked questions
Brief answers to help you make an initial decision.
What is transfer pricing?
The rules requiring related-party transactions (for example, between a parent company and its subsidiary) to be valued at market price, so that neither party artificially shifts profits to the lower-tax jurisdiction.
Who must file Paraguay's Transfer Pricing Technical Study?
IRE taxpayers with related-party transactions abroad that benefit from tax relief and whose previous-year income exceeded PYG 10,000,000,000, as well as those operating with low-tax jurisdictions, free-trade zones or maquila companies.