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Paraguay Tax Guide
South AmericaLast verified June 2026Territorial system
- Top income tax
- 10%
- Capital gains
- 10%
- Corporate
- 10%
- VAT / GST
- 10%
- Residency test
- 120 days
Flat 8-10% on Paraguay-sourced personal income depending on bracket
In short
- Paraguay pairs a 10% flat rate with territorial taxation, very low living costs and one of the easiest residency processes in the world.
- No newcomer tax regime: the standard rates above apply to new residents.
- Watch out: Little English is spoken, summers are very hot, healthcare outside Asunción is weak, and most people use Paraguay as a base rather than a full-time home.
Verified June 2026 · 2 sources
Recent changes
No changes logged since the last full verification.
Full change logBest 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
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimes+
Personal Income Tax
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimesTax 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 rate, withholding, VAT, substance, Pillar Two and treaties+
Business & Corporate Tax
Corporate rate, withholding, VAT, substance, Pillar Two and treatiesCorporate 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 matrixBeyond tax
Living in Paraguay
Paraguay pairs a 10% flat rate with territorial taxation, very low living costs and one of the easiest residency processes in the world.
- Expat hub
- Asunción
- Monthly budget
- ~$1,300
- Climate
- Subtropical, 23°C
- Time zone
- UTC-3
- Tax85
- Cost of living$
- Safety55
- Healthcare58
- English30
- Internet130 Mbps
- Warm climate90
- Residency access90
- Scores 0-100, higher is better. Editorial composite ratings; see method.
Ways to get residency
- Temporary residenceClean criminal record and civil documents; 2 years, then eligible for permanent residence
- Paraguay Investor Pass (2026)US$200,000+ in real estate, securities or tourism assets for direct permanent residence
Watch out: Little English is spoken, summers are very hot, healthcare outside Asunción is weak, and most people use Paraguay as a base rather than a full-time home.
See how Paraguay ranks for remote workers, retirees and familiesData 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?
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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.
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