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.
How It Works in Paraguay
Paraguay does not levy any inheritance tax, estate tax, or death duty. Assets can be transferred to heirs without any tax obligation on the transfer itself. Succession follows Paraguay's Civil Code, which mandates forced heirship rules: a portion of the estate must go to direct descendants and the surviving spouse. Foreign nationals with assets in Paraguay may need to go through Paraguayan succession proceedings for local assets. There is no gift tax either, making Paraguay highly favorable for intergenerational wealth transfer.
Global Comparison
Many developed countries impose significant inheritance taxes. The United States has a federal estate tax of up to 40% on estates exceeding $13.6 million. Japan imposes inheritance tax up to 55%, and the United Kingdom charges 40% above the threshold. Paraguay's zero inheritance tax places it among the most favorable countries for estate planning globally.
Frequently Asked Questions
Can I leave assets in Paraguay to non-resident heirs tax-free?
Yes. Paraguay does not impose any inheritance tax regardless of whether the heirs are residents or non-residents. The transfer of assets upon death is not a taxable event. However, heirs will need to go through the proper legal succession process in Paraguay to claim the assets, which involves a judicial proceeding.
What are Paraguay's forced heirship rules?
Under Paraguayan Civil Code, you cannot freely distribute your entire estate. A mandatory portion (legítima) must go to forced heirs: children receive at least 80% of the estate divided equally among them, and the surviving spouse has usufruct rights. Only the remaining portion (libre disponibilidad) can be freely distributed by will.
Is there a gift tax in Paraguay?
No. Paraguay does not impose a gift tax. You can transfer assets during your lifetime without incurring a specific gift or donation tax. However, if the transferred assets generate income within Paraguay, the recipient would be subject to the normal income tax rules on that income.
Need Help With Inheritance Tax?
Our team of Paraguay tax experts can help you navigate the specifics and optimize your tax position.
Last reviewed: February 2026