Export price of soybeans

By Antonio Villa Berkemeyer, Berkemeyer Attorneys & Counselors

Although initially the Tax Administration also intended to include wheat and maize, the production unions argued that these products were only for the regional market and could not be compared to soy; for this reason and in order to go public, now, soybean exports in nature and its derivatives, should adjust their prices, as required by Law 5061/2013, regulated by Decree 1832 of June 30, 2014, the Executive Branch. This Act provides for the implementation of price adjustments in export transactions of goods, for which the international reference price can be established.

This Decree apply to taxpayers of Income Tax for Commercial, Industrial and Services (IRACIS) and Income Tax for Agricultural Activities (IRAGRO), which export listed goods.

When the price setting for exports will occur? When the price stated in the bill of export is less than the reference price of the exported good.

Reference price = deduct from the price of the goods in transparent markets, exchanges or similar costs (service ports, quality control, insurance and freight) required for delivering the goods at the destination.

What is a price adjustment? A price adjustment is the settlement of income taxes for the difference between the invoice price and the reference price in transparent markets.

Why prices must be adjusted? Prices must be adjusted because sometimes there are differences in the price charged by the obligor. The price payable by the obligor may be less than the reference price on the date of shipment or the price of the previous day that have been quotation.

The Tax Administration will identify transparent markets or stock exchanges to be accepted to determine the reference price, as required by the Act and the Decree.

The Central Bank of Paraguay (BCP) is required to provide to the Tax authorities, the data of the prices of transparent markets or stock exchanges.

The deduction of other costs and items will be permitted as long as they are properly documented, either they are costs needed to generate income and values according to current market prices.