Paraguay vs Hungary
Tax Residency Comparison
Paraguay taxes foreign income at 0% through its territorial system, while Hungary taxes residents at 15% flat. Hungarians switching to Paraguay residency save $15,000 - $60,000+ 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 | 🇭🇺 Hungary |
|---|---|---|
| Foreign Income Tax | 0% | 15% flat |
| Capital Gains Tax | 8% | 15% |
| Corporate Tax | 10% | 9% |
| 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 Hungarians Choose Paraguay
Save $15,000 - $60,000+/Year
The average hungarians moving to Paraguay saves $15,000 - $60,000+ annually by eliminating 15% flat taxes on foreign-sourced income.
Territorial Tax System
Unlike Hungary's worldwide taxation, Paraguay only taxes income generated within its borders. Foreign income is generally exempt.
Location Freedom
While Hungary 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 Hungary Tax Problem
Social contributions are very high (18.5%)
VAT at 27% (highest in EU)
Economic uncertainty
Currency volatility
Important: Leaving Hungary
Hungary has low income tax but high social charges. Paraguay offers even simpler structure.
Our team includes specialists familiar with Hungary tax law who can help you navigate the transition properly and legally.
Who Should Consider Paraguay Over Hungary?
Remote Workers
Keep 100% of your foreign-earned income instead of losing 15% flat to taxes.
Entrepreneurs
Build your business without the Hungary tax burden holding you back.
Investors
Optimize capital gains with Paraguay's favorable 8% rate vs 15%.
Retirees
Stretch your pension and investments further with minimal tax obligations.
Frequently Asked Questions
Is Paraguay better than Hungary for taxes?
For foreign income, Paraguay charges 0% versus Hungary's 15% flat rate plus 18.5% social contributions. However, Hungary's 9% corporate tax rate is lower than Paraguay's 10%, making the comparison nuanced for business owners.
What's the tax difference between Paraguay and Hungary?
Hungary taxes income at a flat 15% with 18.5% social contributions and has the EU's highest VAT at 27%. Paraguay taxes only local income at 10%, has 10% VAT, zero tax on foreign income, and no mandatory social contributions for non-workers.
Can Hungarians get Paraguay residency easily?
Yes. Hungarian citizens enter Paraguay visa-free and can apply directly for permanent residency. The process takes 4-6 weeks with straightforward documentation requirements.
Explore More Resources
Everything you need to make an informed decision about Paraguay residency
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Last reviewed: February 2026