Tax in Latin America · updated October 2026
Low-tax countries in Latin America
5 Latin American jurisdictions pass the Tax Atlas low-tax test: a top personal income tax rate of 25% or less, or no tax on foreign income. 5 of them tax only local income. They are ordered by tax, then by quality of life.
The table
Latin American countries with low personal tax
| Country | Top income tax | Capital gains | Corporate | Foreign income | Residency route | Budget / month | Overall rank |
|---|---|---|---|---|---|---|---|
| PanamaPanama City | 25% | 10% | 25% | Territorial | Pensionado visa | $2,600 | #15 |
| ParaguayAsunción | 10% | 10% | 10% | Territorial | Temporary residence | $1,300 | #19 |
| Costa RicaSan José (Central Valley) | 25% | 0-15% | 30% | Territorial | Digital Nomad visa | $2,300 | #34 |
| UruguayMontevideo | 36% | 0-12% | 25% | Territorial | Legal residence | $2,500 | #17 |
| Dominican RepublicSanto Domingo | 25% | 27% | 27% | Territorial | Retiree (pensionado) residency | $1,900 | #29 |
Tax figures come from each country profile in the Tax Atlas dataset. Budgets are editorial estimates for one person in the main expat city, in US dollars. Overall rank is the position on the default best places to live ranking. Not tax or immigration advice: verify with a qualified adviser.
Before you choose
What the table does not show
- Territorial does not mean tax-free. Local salary, local business profits and local property are still taxed, and the line between local and foreign income is drawn differently in each country. See the territorial tax countries list.
- Leaving can cost money. Your current country may keep taxing you, or charge an exit tax, after you move. Check the day counts and ties on the easiest tax residency list.
- The Caribbean islands go further. Several charge no personal income tax at all. They rank on the tax-free retirement countries page.
- Want the whole region? The best places to live in the Americas ranking scores every jurisdiction on tax, cost, safety and healthcare together.
Questions
Frequently asked
Which Latin American countries have the lowest taxes?+
Tax Atlas tracks 5 Latin American jurisdictions with a top personal income tax rate of 25% or less, or no tax on foreign income: Panama (25%), Paraguay (10%), Costa Rica (25%), Uruguay (36%), Dominican Republic (25%). The table on this page adds capital gains and corporate rates, a residency route and a monthly budget for each.
Which Latin American countries do not tax foreign income?+
Panama, Paraguay, Costa Rica, Uruguay, Dominican Republic tax local income but leave most foreign-source income alone (territorial or exempt treatment in the dataset). What counts as foreign income, and how long any exemption lasts, differs by country, so verify with a qualified adviser.
Which Latin American country has the lowest income tax rate?+
By top personal income tax rate, the lowest here are Paraguay (10%), Panama (25%), Costa Rica (25%). The top rate applies to local income; under territorial systems most foreign income is outside the charge altogether.
Which Latin American countries tax worldwide income?+
Mexico (top rate 35%) taxes residents on worldwide income above the 25% low-tax line, so it is left out of the table. It still appears on the best places to live in the Americas ranking.
Which low-tax Latin American country is easiest to get residency in?+
On the Tax Atlas residency access rating, the most accessible here are Paraguay (90/100, for example Temporary residence), Panama (80/100, for example Pensionado visa), Uruguay (75/100, for example Legal residence). The rating is an editorial composite, and route requirements change, so check the current rules with the immigration authority or an adviser.
What is the cheapest low-tax country in Latin America?+
By the Tax Atlas monthly budget for one person in the main expat city, the cheapest here are Paraguay (about $1,300), Dominican Republic (about $1,900), Costa Rica (about $2,300). Budgets are editorial estimates in US dollars, not official figures.
More rankings
Best places to live for…
- Overall
- Remote workers
- Retirees
- Families
- Founders
- Investors
- On a budget
- High tax, with breaks
- Good healthcare, low tax
- Safest, low tax
- Tax-free retirement
- English-speaking, low tax
- Warm, low tax
- Cheap, low tax
- Low tax in Europe
- Europe
- Asia-Pacific
- The Americas
- Middle East & Africa
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