Paraguay Tax Rates
Paraguay operates a territorial tax system administered by the Subsecretaría de Estado de Tributación (SET). Only Paraguayan-source income is taxable, making it attractive for international earners. Personal income tax is a flat 10%, corporate tax is 10%, and VAT is 10%. Paraguay has one of the lowest and simplest tax regimes in South America.
Top Income Tax Rate
10%
Corporate Tax Rate
10%
VAT / Sales Tax
10%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Paraguay imposes a personal income tax (IRP) at 8% on income between 36 million and 120 million PYG and 10% on income above 120 million PYG annually. Only Paraguayan-source income is taxable under the territorial system. Foreign-source income is completely exempt. The low rates and territorial system make Paraguay one of the most tax-friendly countries in South America.
| Income Range | Tax Rate |
|---|---|
| ₲0 – ₲36.0M | 0% |
| ₲36.0M – ₲120.0M | 8% |
| ₲120.0M+ | 10% |
Corporate Tax
Paraguay imposes a flat 10% corporate income tax (IRACIS) on Paraguayan-source income. An additional 5% applies on dividend distributions (branch profit remittance for non-residents). Agricultural income is subject to a separate regime (IRAGRO) also at 10%. The combined rate on distributed profits is approximately 14.5%.
Standard Rate
10%
Capital Gains Tax
Capital gains in Paraguay are included in taxable income and subject to the applicable income tax rate (8-10% for individuals, 10% for companies). Only gains on Paraguayan-source assets are taxable.
Rate
10%
VAT / Sales Tax
Paraguay levies a 10% VAT (IVA) on most goods and services. A reduced 5% rate applies to basic food items, medicines, agricultural products, and interest payments. Exports are zero-rated. Monthly IVA returns are required.
Standard Rate
10%
Cryptocurrency Tax
Paraguay does not have specific cryptocurrency tax legislation. Under the territorial system, crypto gains from foreign platforms would be exempt as foreign-source income. Paraguay has attracted Bitcoin mining operations due to cheap hydroelectric power.
Tax Treaties
Paraguay has a limited tax treaty network with approximately 4 agreements. As a Mercosur member, Paraguay cooperates on tax matters with Argentina, Brazil, and Uruguay.
Treaty Network
4
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Paraguay
See how much you could save by moving here from your current country.
+$15K
Tax in United States
$24K
24.4% effective
Tax in Paraguay
$9K
9% effective
You Save
63.1%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
