Tax aspects applicable to importing companies and final consumers of electric and hybrid vehicles according to the tax legislation in force in the Republic of Paraguay as of 2021

Abstract

In the Republic of Paraguay, a regulatory framework is currently in force, Law 5183/2014 that modifies Law 4601/2012 "Incentives for the importation of electric vehicles" whose main objective is to encourage importing companies to import electric and hybrid vehicles by exempting fiscal taxes and customs duties. Although this generates interest on the part of the business sector, it does not contribute directly to its commercialization, because this legislation does not contemplate the final consumers, who through the acquisition of these vehicles enable economic growth and the reduction of environmental pollution. The mere importation of these, without the possibility of sale due to the high cost it represents, delays the implementation in Paraguay of this new global trend of current use of electric and hybrid vehicles. There is a need to create new policies aimed at the implementation of real actions to reduce pollution at the national level through the use of more sustainable means of transport, avoiding noise and environmental pollution. This legislation was enacted for the first time in 2012 and modified in 2014. In the 2014 modification, a maximum period of validity of 10 years has been established, so this would also create a problem because, at that time, the importation of electric vehicles and hybrids was conducted in a smaller proportion. Currently, the import rate is increasing, so it is important to extend this period to contribute to these import and marketing incentives. Likewise, the general objective of this research is to conduct an analysis of this legal framework, thus exposing the existing problems and the proposal of possible fiscal solutions to fulfill the task of this law, through a qualitative approach and the analysis of statistical data. in terms of the number of electric and hybrid vehicles imported and marketed to date and the damage caused by vehicles powered by combustion engines that could be reduced exponentially.