Paraguay vs Germany
Tax Residency Comparison
Paraguay taxes foreign income at 0% through its territorial system, while Germany taxes residents at up to 45%. Germans switching to Paraguay residency save $50,000 - $200,000+ per year on average, with a fast 90-day process and only a $5,000 bank deposit required.
Side-by-Side Tax Comparison
| Category | 🇵🇾 Paraguay | 🇩🇪 Germany |
|---|---|---|
| Foreign Income Tax | 0% | up to 45% |
| Capital Gains Tax | 8% | 26.375% |
| Corporate Tax | 10% | 30% |
| Inheritance/Estate Tax | None | 7-50% |
| Residency Timeline | 90 days | N/A |
| Investment Required | $5,000 bank deposit | N/A |
| Physical Presence | Once every 3 years | 183+ days/year |
| Path to Citizenship | 3 years to citizenship | Varies |
Why Germans Choose Paraguay
Save $50,000 - $200,000+/Year
The average germans moving to Paraguay saves $50,000 - $200,000+ annually by eliminating up to 45% taxes on foreign-sourced income.
Territorial Tax System
Unlike Germany's worldwide taxation, Paraguay only taxes income generated within its borders. Foreign income is generally exempt.
Location Freedom
While Germany requires 183+ days presence, Paraguay only requires a visit once every 3 years to maintain residency.
Fast Process
Get permanent residency in just 90 days. No years of waiting, no complex point systems, no quotas.
The Germany Tax Problem
Solidarity surcharge on top of income tax
Church tax if registered
Complex bureaucracy
Worldwide taxation for residents
Important: Leaving Germany
Germany requires genuine relocation to break tax residency. Paraguay offers a concrete, documented residency that German authorities recognize.
Our team includes specialists familiar with Germany tax law who can help you navigate the transition properly and legally.
Who Should Consider Paraguay Over Germany?
Remote Workers
Keep 100% of your foreign-earned income instead of losing up to 45% to taxes.
Entrepreneurs
Build your business without the Germany tax burden holding you back.
Investors
Optimize capital gains with Paraguay's favorable 8% rate vs 26.375%.
Retirees
Stretch your pension and investments further with minimal tax obligations.
Frequently Asked Questions
Is Paraguay better than Germany for taxes?
For foreign-sourced income, Paraguay charges 0% compared to Germany's rates of up to 45% plus surcharges. Paraguay's 10% corporate tax also significantly undercuts Germany's effective 30% corporate rate.
What's the tax difference between Paraguay and Germany?
Germany taxes worldwide income at up to 45% plus solidarity surcharge, capital gains at 26.375%, and inheritance at 7-50%. Paraguay taxes only local income at 10%, with zero tax on foreign income and no inheritance tax.
Can Germans get Paraguay residency easily?
Yes. Germans enter Paraguay visa-free and can apply for permanent residency immediately. The process takes 4-6 weeks and German authorities generally recognize Paraguay residency as legitimate foreign tax residence.
Explore More Resources
Everything you need to make an informed decision about Paraguay residency
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Last reviewed: February 2026