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.
How It Works in Paraguay
Paraguay applies a flat 8% effective tax rate on capital gains derived from assets located within Paraguay. This is calculated as a 10% income tax on a presumed profit margin of 30% of the sale price, or on actual documented gains. Gains on foreign-held assets are not taxed under Paraguay's territorial system. Real estate sales by individuals may be subject to a simplified regime under IRP (personal income tax) depending on annual thresholds.
Global Comparison
Most developed countries tax capital gains at 15-30% or more, with some like the United States applying rates up to 37% on short-term gains. Paraguay's effective 8% rate on domestic gains and 0% on foreign gains makes it one of the most favorable jurisdictions globally for investors and asset holders.
Frequently Asked Questions
Are capital gains on foreign stocks taxed in Paraguay?
No. Paraguay operates a territorial tax system, meaning only income and gains generated within Paraguay are subject to tax. If you sell stocks on a foreign exchange or dispose of assets held outside Paraguay, those gains are not taxable in Paraguay.
What is the effective capital gains rate on Paraguayan real estate?
The effective rate is approximately 8%. This is calculated by applying the 10% income tax rate to a presumed profit of 30% of the sale price. Alternatively, if the actual gain is documented and lower, you may pay 10% on the real profit, whichever is more favorable.
Do I need to report foreign capital gains to Paraguayan tax authorities?
While Paraguay does not tax foreign-source income, tax residents are expected to file annual returns. Foreign gains are reported as exempt income. Proper record-keeping is recommended to demonstrate the foreign source of gains if questioned by the SET (tax authority).
Need Help With Capital Gains Tax?
Our team of Paraguay tax experts can help you navigate the specifics and optimize your tax position.
Last reviewed: February 2026