Paraguay vs Italy
Tax Residency Comparison
Paraguay taxes foreign income at 0% through its territorial system, while Italy taxes residents at up to 43%. Italians switching to Paraguay residency save $45,000 - $180,000+ 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 | 🇮🇹 Italy |
|---|---|---|
| Foreign Income Tax | 0% | up to 43% |
| Capital Gains Tax | 8% | 26% |
| Corporate Tax | 10% | 24% |
| Inheritance/Estate Tax | None | 4-8% |
| 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 Italians Choose Paraguay
Save $45,000 - $180,000+/Year
The average italians moving to Paraguay saves $45,000 - $180,000+ annually by eliminating up to 43% taxes on foreign-sourced income.
Territorial Tax System
Unlike Italy's worldwide taxation, Paraguay only taxes income generated within its borders. Foreign income is generally exempt.
Location Freedom
While Italy 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 Italy Tax Problem
Complex tax system with regional variations
High social contributions
Wealth disclosure requirements
IVAFE tax on foreign assets
Important: Leaving Italy
Italy has specific non-residency rules. Paraguay residency provides genuine foreign tax residence documentation.
Our team includes specialists familiar with Italy tax law who can help you navigate the transition properly and legally.
Who Should Consider Paraguay Over Italy?
Remote Workers
Keep 100% of your foreign-earned income instead of losing up to 43% to taxes.
Entrepreneurs
Build your business without the Italy tax burden holding you back.
Investors
Optimize capital gains with Paraguay's favorable 8% rate vs 26%.
Retirees
Stretch your pension and investments further with minimal tax obligations.
Frequently Asked Questions
Is Paraguay better than Italy for taxes?
For foreign income, Paraguay is significantly better with 0% tax versus Italy's 43% top rate. Paraguay also eliminates IVAFE tax on foreign assets, the 26% capital gains tax, and Italy's complex regional surcharges.
What's the tax difference between Paraguay and Italy?
Italy taxes income at up to 43% plus regional surcharges, capital gains at 26%, and imposes IVAFE on foreign financial assets. Paraguay taxes only local income at 10% with zero tax on foreign income and no tax on foreign assets.
Can Italians get Paraguay residency easily?
Yes. Italian citizens enter Paraguay visa-free and can apply for permanent residency directly. The process takes 4-6 weeks and is especially popular among Italians given the strong Italian diaspora community in Paraguay.
Explore More Resources
Everything you need to make an informed decision about Paraguay residency
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Last reviewed: February 2026