e-Invoicing Process in Paraguay

Paraguay’s e-invoice process has been a significant development in the country’s effort to modernize its tax system and streamline administrative processes for businesses. E-invoicing has brought about several benefits, including improved efficiency, reduced costs, and increased compliance with tax regulations. The e-invoicing system is called SIFEN (Integrated National Electronic Invoicing System). The SIFEN system established the new Paraguayan tax system. The SIFEN uses the e-Kuatia platform to issue receive, validate and store DTE tax documents. The law explains several aspects related with creation, transition, receiving, processing, and archiving of e-invoices.

Paraguay e-Invoice Process involves three phases:

1. Pilot phase
2. Voluntary phase
3. Mandatory phase.

1) Subsecretaría de Estado de Tributación (SET) issued a decree (No:7795/17) on 27 September 2017 including the creation of the National Electronic Invoicing System (SIFEN).

2) The SET issued electronic invoicing regulations in the 2018, highlighting the conditions and requirements to start the pilot project to implement the SIFEN, describing the main requirements for the electronic invoices.

3) Some taxpayers integrated the Pilot Project and in November 2018, these companies issued the first electronic invoice.

4) At the beginning of 2019, the second stage was started by SET, called the ‘Voluntary Stage’, in which the local taxpayers that participate in this stage have the intention to become electronic invoice issuers(Voluntary).

5) SET issued General Resolution No:105/2021 that provides the administrative measures for the issuance of Electronic Tax Documents. This resolution establishes the dates that taxpayers in the pilot plan and of the voluntary phase were to issue their tax documents according to General Resolution No:95/2021, from July 1, 2022, with the purpose of achieving a sustainable and gradual implementation of the SIFEN.

6) The list of taxpayers that make up the groups will be available on the SIFEN web portal (ekuatia.set.gov.py/portal/ekuatia), on SET’s web page, and will inform taxpayers affected to the “Marandu” which means Tax Mailbox Documentos Tributarios Electrónicos de Paraguay.

7) The obligations for the Pilot Plan, Voluntary Phase, and Obligatory Phase are scheduled between July 1, 2022, and October 1, 2024.

Compliance Timeline

Additional company lists will form the basis for each phased period, of which there will be 10 stages. If everything goes normally, the final phase is expected in October 2024. More information on the taxpayer groups is available on the SIFEN web portal.

Phases obligation dates

1- Pilot Phase; July 1, 2022

2- Voluntary Phase; July 1, 2022

3- Mandatory Phase; January 02, 2023- October 1, 2024

Documents that can be issued electronically

The documents that will be issued electronically are the following:

• Electronic bill
• Electronic export invoice
• Electronic import invoice
• Electronic self-invoicing
• Electronic credit note
• Electronic debit note
• Electronic delivery note

Electronic Tax Documents in Paraguay (DTE)

DTEs are electronic tax documents that have been validated and approved by the SIFEN. They back tax credits and debits pertaining to VAT, as well as income and expenses pertaining to income taxes.

There are several DTE at SIFEN:

• Electronic Invoice
• Electronic Import Invoice
• Electronic Export Invoice

Complimentary Electronic Documents
• Electronic Credit Note
• Electronic Debit Note
• Electronic Bill of Lading
• Electronic Self-Invoice

DE: electronic documents generated by an authorized electronic document issuer.

KuDE — Graphic Representation of the Electronic Invoice: When a recipient cannot receive an electronic file, a graphic representation of the XML called the KuDE should be delivered. The KuDE can be in printed or digital format. The KuDE documents must be stored for 6 months.

How Does E-Invoice Work in Paraguay?

1. Electronic invoices are generated in XML format and require a seal for each document.
2. Each electronic document must contain a digital signature and a control code to ensure her authenticity.
3. The invoice issuer needs to submit electronic documents to the tax authority for validation.
4. Upon receipt, the tax authority (SIFEN) will validate the electronic documents, converting them into DTEs. DTEs can be used to support VAT credits and debits, as well as to document goods and services sales and expenses for income taxes.
5. The legal validity of the electronic invoice is established only after it has been validated and authorized by the SET.
6. The electronic invoice issuer must check the result of the validation process through the web service provided by the tax authority.
7. If the buyer is an electronic recipient, the invoice issuer must deliver DTEs through web services, email or make them available in an accessible application for download. The recipient must also accept or reject the received DTEs and provide the reason for rejection.
8. For non-electronic recipients, the invoice issuer must provide a physical or digital representation of the document for download via email or other means.
9. DTEs need to be securely stored to ensure integrity, confidentiality, and accessibility.

About DTE Issuer

1. To be authorized by the tax authority as an electronic invoice issuer.
2. To obtain a digital certificate from certification service providers to ensure the authenticity, integrity and non-repudiation of electronic documents (DE), and to include the issuer’s tax ID (RUC).
3. To have sufficient technical support for invoice issuance, reception, and storage.
4. To complete mandatory tests in the SET’s testing environment to ensure satisfactory data quality in DEs.
5. To receive authorization and a digital stamp for DTEs through the Marangatu tax management system, using a confidential user access code. Users must ensure they are compliant with their tax obligations and have an active RUC.
6. To request the taxpayer security code (CSC) from the SET for generating the QR code to be printed on the KuDE associated with a DE.

Technical Standards

There is some informative knowledge about tax authority, SİFEN administrative procedures, format, digital signature, fiscal control, print format, and archiving.

• Obligation: Currently, only entities obligated by the compliance timeline are required to perform electronic invoicing. Businesses interested in initiating electronic invoicing can register with the SIFEN.
• Fiscal Control: There are two types of validation processes:
• Post-validation: The electronic document must be sent to the SET within 72 hours of issuance.
• Pre-validation: The document must undergo validation by the SET before being sent to the recipient. It must contain a unique control code (CDC) for authenticity validation and QR code generation for the KuDE format.
• Format: Data transmission to the SET is accomplished through a regulated XML format known as the electronic document or the electronic tax document, contingent on whether it has undergone pre or post-validation.
• Digital Signature: Electronic documents must be digitally signed using a certificate issued by an authorized entity.
• Administrative Procedures: Companies are required to register in the SIFEN system and undergo a certification process.
• Print Format: The print format for these documents is referred to as the KUDE.
• Archiving: Both issuers and recipients are mandated to archive electronic documents for 5 years.

Melasoft attaches importance to data validation to avoid the penalties stipulated by SIFEN. In this context, it performs intelligent data validation to ensure that the invoice data complies with SIFEN regulations, thus ensuring error-free invoices. Melasoft eInvoice Solution generates invoice XML to be compatible with SIFEN. For example, e-invoice, e-invoice for export and import, e-self-invoicing, e-credit note, debit note and delivery note.