Paraguay Tax Guide
Figures on this page were last verified against the cited sources in June 2026. Always check official sources before making a relocation or incorporation decision.
Best for
- Foreign income exempt
Territorial system — overseas income generally outside the local tax net.
- Corporate-friendly
10% corporate tax — competitive for founders and holding structures.
- Special regime available
Paraguay Investor Pass (2026) — Launched April 2026: permanent residency directly through real estate, securities, or tourism invest…
- Digital-nomad-friendly
Combination of foreign-income treatment and residency rules works for nomads.
Personal Income Tax
Tax Residency
Income Tax Rates
Foreign Income Treatment
Investment Income
10% on Paraguay assets
Wealth & Inheritance
Special Regimes
Practical Notes
Lowest personal tax rate in South America. Mercosur member. Low cost of living. Center-of-interests residency test makes Paraguay one of the few places where you can become a tax resident without physical-presence days.
Business & Corporate Tax
Corporate Income Tax
Withholding Taxes
VAT / GST
Compliance & Substance
Notable Regimes
- Maquiladora regime
- Free zones
OECD Pillar Two (15% global minimum tax)
No Pillar Two legislation enacted.
See full implementation trackerTax Treaty Network
Very limited treaty network. No US or UK treaty.
See full treaty matrixData Sources
Last verified: June 2026. Always check official sources before making a decision.
FAQ
What is the personal income tax rate in Paraguay?
Paraguay has a top personal income tax rate of 10%. The tax structure is: Flat 8-10% on Paraguay-sourced personal income depending on bracket. See the detailed breakdown above and verify with official sources.
Do I need to pay tax on foreign income in Paraguay?
Paraguay uses a territorial system for foreign income. Foreign income generally not taxed
What are the residency requirements for Paraguay?
Tax residency in Paraguay generally requires 120 days of physical presence. No strict day-count rule; tax residency hinges on the "center of economic and vital interests" — possible with light Paraguay presence. Always verify current rules with official sources.
Is there a wealth tax in Paraguay?
No, Paraguay does not have a wealth tax. No wealth tax
What is the corporate tax rate in Paraguay?
The corporate tax rate in Paraguay is 10%. 10% corporate tax rate
US citizen moving to Paraguay? Read this first.
Paraguay uses a territorial system for foreign income. For US citizens this often combines well with FEIE.
- •Foreign-source income may be exempt or only taxed on remittance in Paraguay, but the US still taxes US citizens worldwide. FEIE (~$130k earned income) plus FTC on any Paraguay tax paid is the standard combination.
- •Self-employment tax (15.3%) is owed in full — Paraguay has no totalization agreement with the US.
- •Carefully document whether income is "Paraguay-source" or foreign-source. The classification drives both Paraguay and US tax outcomes; getting it wrong is the #1 audit risk in this category.
- •Residency requires 120 days. Special regimes may further reduce Paraguay tax — check the country page for current options.
Need someone to actually plan Paraguay for you?
TaxAtlas covers the rates and rules. For the personal side — exit planning, residency strategy, business structure, or filings — request a response and we'll point you to relevant research or a specialist who handles Paraguay cases.
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