Paraguay Tax Topics

Your complete reference guide to taxes in Paraguay. From personal income tax to crypto regulations, find expert explanations of every tax topic that matters.

20 topics covered

Personal Taxes

Personal Income Tax (IRP) in Paraguay

Personal income tax, known as IRP (Impuesto a la Renta Personal) in Paraguay, is a tax on the income earned by individual residents and non-residents from sources within the country. It covers employment income, investment income, capital gains, and other personal earnings.

Capital Gains Tax in Paraguay

Capital gains tax is a levy on the profit realized from the sale of non-inventory assets such as stocks, bonds, real estate, or businesses. In most countries, these gains are taxed as part of income tax or through a separate capital gains schedule.

Dividend Tax in Paraguay

Dividend tax is a levy on distributions of corporate profits to shareholders. It can be applied as a withholding tax at the corporate level when dividends are paid, or as part of the shareholder's personal income tax, or both.

Social Security (IPS) in Paraguay

Social security in Paraguay is administered by the IPS (Instituto de Previsión Social), the main public social security institution. It provides healthcare coverage, retirement pensions, disability benefits, and maternity/paternity leave to contributing workers and their dependents.

Business Taxes

Corporate Tax in Paraguay

Corporate tax, known as IRACIS (Impuesto a la Renta de Actividades Comerciales, Industriales y de Servicios) in Paraguay, is a tax levied on the net profits of companies and businesses. It applies to commercial, industrial, and service activities conducted within the country.

VAT (IVA) in Paraguay

Value Added Tax (VAT), called IVA (Impuesto al Valor Agregado) in Paraguay, is a consumption tax applied at each stage of the supply chain on the value added to goods and services. The final consumer bears the tax burden, while businesses collect and remit it to the government.

Withholding Tax in Paraguay

Withholding tax is a tax deducted at source from payments made to the recipient. In Paraguay, withholding taxes apply to various payments including dividends, interest, royalties, fees for services, and other income types, with different rates for resident and non-resident recipients.

Transfer Pricing Rules in Paraguay

Transfer pricing refers to the prices charged between related parties (such as a parent company and its subsidiary) for goods, services, or intellectual property. Transfer pricing rules ensure these intercompany transactions are conducted at arm's length prices, comparable to prices charged between unrelated parties.

RUC Number in Paraguay

The RUC (Registro Unico de Contribuyentes) is Paraguay's unique taxpayer identification number issued by the SET (Subsecretaría de Estado de Tributación). It is the equivalent of a tax ID or TIN and is required for all tax-related activities, business operations, and formal economic transactions in Paraguay.

Residency & Immigration

Tax Residency in Paraguay

Tax residency determines which country has the right to tax an individual's income. In Paraguay, tax residency is distinct from immigration residency and is primarily determined by physical presence and the center of vital interests.

Territorial Tax System in Paraguay

A territorial tax system is a taxation approach where a country only taxes income generated within its own borders. Income earned from foreign sources is either exempt or excluded from the domestic tax base, regardless of the taxpayer's residency status.

Digital Nomad Tax Guide for Paraguay

Digital nomad taxation refers to how location-independent remote workers are taxed when living in or working from a particular country. For digital nomads, the key question is whether income earned from foreign clients while physically present in a country triggers local tax obligations.

Expat Tax Guide for Paraguay

Expat taxation covers the tax obligations of foreign nationals living abroad in a new country. For expatriates in Paraguay, this includes understanding local tax obligations, managing tax responsibilities in their home country, and optimizing their overall tax position across jurisdictions.

Double Tax Treaties in Paraguay

Double tax treaties (DTTs), also called double taxation agreements (DTAs), are bilateral agreements between two countries that determine how income is taxed when a taxpayer has connections to both countries. They prevent the same income from being taxed twice and typically reduce withholding tax rates on cross-border payments.

Property & Inheritance

Real Estate Tax in Paraguay

Real estate tax in Paraguay encompasses the annual property tax (Impuesto Inmobiliario), the tax on property transfers, and income tax on rental income or capital gains from property sales. These taxes are administered at both municipal and national levels.

Inheritance Tax in Paraguay

Inheritance tax (also called estate tax or death duty) is a tax imposed on the transfer of assets from a deceased person to their heirs or beneficiaries. Some countries impose this on the estate itself, while others tax the recipients of the inheritance.

Trade & International

Free Trade Zones in Paraguay

Free trade zones (zonas francas) are designated geographic areas within a country where goods can be imported, stored, processed, manufactured, and re-exported with special tax and customs benefits. They are designed to attract foreign investment and boost exports.

Maquila Regime in Paraguay

The Maquila regime (Law 1064/97) is a special manufacturing and export program in Paraguay modeled after Mexico's maquiladora system. It allows foreign companies to import raw materials and components duty-free, process or assemble them in Paraguay, and export the finished products with minimal taxation.

Import Duties and Customs in Paraguay

Import duties are taxes levied on goods entering a country from abroad. In Paraguay, customs duties are based on the Mercosur Common External Tariff (CET) and vary by product category.

Specialized Topics

Cryptocurrency Tax in Paraguay

Cryptocurrency taxation refers to how governments classify and tax digital assets such as Bitcoin, Ethereum, and other tokens. Tax treatment varies globally and can apply to trading gains, mining income, staking rewards, and crypto-to-crypto exchanges.

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