Tax Atlas

Paraguay: tax residency & income tax rates

Last verified October 26, 2026 by Henning Stanger, Authorized Accountant (Autorisert regnskapsfører) · 16 verified facts · 20 sources

TL;DR

  • 120 days (as of 2026)PwC Worldwide Tax Summaries“An individual is deemed to be tax-resident in Paraguay if one spends more than 120 days in a year in the country.”View source · accessed 2026-10-26 — PwC says an individual who spends more than 120 days in a year in Paraguay is tax resident, and Ley 125/1991 article 152 uses the same 120 days only to presume a habitual residence for fiscal domicile.
  • 10% (as of 2026)PwC Worldwide Tax Summaries“10% equal to or greater than PYG 150,000,001.”View source · accessed 2026-10-26 — The top IRP rate on earned income is 10% on annual net income above PYG 150 million, and PwC reports no other income taxes such as a surcharge or local tax.
  • No (as of 2026)Base Legal (Paraguayan legal database), Ley 6984/2022 De Migraciones“Será otorgada por un plazo de hasta 2 (dos) años, prorrogables por igual período y será requisito previo al otorgamiento de la Residencia Permanente.”View source · accessed 2026-10-26 — Paraguay has no dedicated digital nomad visa: remote workers use the ordinary temporary residence under Ley 6984/2022, valid up to 2 years and extendable, which must come before permanent residence.

Tax residency rules in Paraguay

As of 2026, Paraguay’s tax-residency test centres on a presence threshold of 120 daysPwC Worldwide Tax Summaries“An individual is deemed to be tax-resident in Paraguay if one spends more than 120 days in a year in the country.”View source · accessed 2026-10-26. PwC says an individual who spends more than 120 days in a year in Paraguay is tax resident, and Ley 125/1991 article 152 uses the same 120 days only to presume a habitual residence for fiscal domicile. The DNIT instead defines a resident individual by a permanent residence permit, so treat the day count as a presumption and not as a standalone test.

Tax year period
1 January to 31 December (as of 2026)PwC Worldwide Tax Summaries“Tax liability will be deemed to originate upon the close of the fiscal year, which will coincide with the calendar year.”View source · accessed 2026-10-26 — The Paraguayan fiscal year coincides with the calendar year, so the IRP tax year runs from 1 January to 31 December. The annual IRP return is due in March of the following year.
Residency test
The DNIT and Decreto 3181/2019 treat an individual as resident for tax purposes only with a permanent residence permit, and the decree still cites the replaced Ley 978/1996. A Paraguayan law firm argues that temporary residents with a cedula and RUC can also be treated as residents, which the DNIT texts reviewed here do not confirm. [source]DNIT (Direccion Nacional de Ingresos Tributarios), Preguntas Frecuentes“En el caso de la persona física, se considerará Residente a los efectos fiscales a aquel que cuente con residencia permanente en el territorio de la República conforme a la Ley N° 978/96 «De Migraciones» y sus modificaciones.”View source · accessed 2026-10-26

Income tax rates in Paraguay

As of 2026, the headline personal income tax rate in Paraguay is 10%PwC Worldwide Tax Summaries“10% equal to or greater than PYG 150,000,001.”View source · accessed 2026-10-26. The top IRP rate on earned income is 10% on annual net income above PYG 150 million, and PwC reports no other income taxes such as a surcharge or local tax. The 9% employee IPS social security contribution is separate and is not included in the 10%.

Dividend tax rate
Dividends distributed by Paraguayan companies bear the IDU at 8% when the recipient is a resident and 15% when the recipient is a non-resident. For a resident individual the tax is a single final payment withheld by the company. [source]PwC Worldwide Tax Summaries“Dividends are taxable income when the recipient (or shareholder) is a non-resident, in which case a 15% withholding tax (WHT) applies. An 8% WHT applies to Paraguayan residents.”View source · accessed 2026-10-26
Social security employee rate
Employees pay 9% of wages to the IPS and employers add 16.5%, for 25.5% in total, according to the MIC investment guide. PwC lists 11% and 17% for financial entities and says the contribution is optional for some independent positions such as directors and managers. [source]Ministerio de Industria y Comercio de Paraguay, Guia de Inversiones 2025“El porcentaje de aporte obrero-patronal vigente es del 25,5 % mensual sobre el salario devengado de los trabajadores, correspondiendo el 9 % a los trabajadores y el 16,5 % a los empleadores.”View source · accessed 2026-10-26
Non resident income tax rate
15% (as of 2026)DNIT (Direccion Nacional de Ingresos Tributarios), Ley 6380/2019 text“La tasa del INR será del 15% (quince por ciento).”View source · accessed 2026-10-26 — Non-residents pay the INR at 15% on a presumed net income, which is 70% of the gross amount for personal services, giving an effective 10.5% of the gross fee. The Paraguayan payer withholds it and the payment is final.
Capital gains rate
8% (as of 2026)DNIT (Direccion Nacional de Ingresos Tributarios), Ley 6380/2019 text“La tasa aplicable para las rentas y ganancias del capital será del 8% (ocho por ciento).”View source · accessed 2026-10-26 — Capital income and gains of individuals are taxed under the IRP at 8%, assessed separately from salary and fees. For sales the net income is presumed to be the lower of 30% of the sale value or the documented gain, so the effective rate on a sale is at most 2.4% of the price, and movable property sales up to PYG 20 million a year are exempt.
Pit income brackets
8–10% (as of 2026)PwC Worldwide Tax Summaries“8% up to 50 million Paraguayan guaranies (PYG). 9% from PYG 50,000,001 to PYG 150 million. 10% equal to or greater than PYG 150,000,001.”View source · accessed 2026-10-26 — Brackets apply to annual net income from personal services: 8% up to PYG 50 million, 9% from PYG 50 million to PYG 150 million and 10% above. A taxpayer whose gross income from personal services does not exceed PYG 80 million owes no tax but keeps the formal obligations.
Vat standard rate
10% (as of 2026)DNIT (Direccion Nacional de Ingresos Tributarios), Ley 6380/2019 text“10% (diez por ciento) para todos los demás casos.”View source · accessed 2026-10-26 — The standard IVA rate is 10%, with a 5% rate for housing rent, real estate sales, basic food items, listed farm products and registered medicines. Personal services rendered in an employment relationship are not subject to IVA.
Interest income treatment
Interest on deposits with Paraguayan banks, financial entities and savings cooperatives is exempt from the IRP, while interest paid by other Paraguayan payers falls under the 8% capital income rate. Interest earned abroad is not in the list of Paraguayan-source income in article 48, so it is outside the IRP. [source]DNIT (Direccion Nacional de Ingresos Tributarios), Ley 6380/2019 text“Los intereses, comisiones o rendimientos por depósitos o colocaciones de capitales en entidades bancarias y financieras en el país, regidas por la Ley N° 861/1996, así como en Cooperativas y Mutuales que realicen actividades de Ahorro y Crédito.”View source · accessed 2026-10-26

Special tax regimes in Paraguay

PwC says Paraguay gives no credit for income tax paid abroad to individuals, and lists treaties with Chile, Qatar, Taiwan, the UAE, Uruguay and Spain. The DNIT law list shows the Spain treaty was approved by Ley 7271/2024. [source]PwC Worldwide Tax Summaries“Paraguay has signed Agreements to avoid Double Taxation with Chile, Qatar, Taiwan, United Arab Emirates, Uruguay and Spain.”View source · accessed 2026-10-26

Territorial taxation
Individuals, whether resident in Paraguay or abroad, are taxed on Paraguayan-source income only, so income from foreign activities, assets and investments generally falls outside the IRP. The main exception is pay for services performed abroad for Paraguayan IRE or IRP taxpayers. [source]PwC Worldwide Tax Summaries“Individuals with residence in Paraguay and/or abroad are taxable on Paraguayan-source income.”View source · accessed 2026-10-26
Foreign performed services rule
A resident who works from abroad is taxed in Paraguay when the services are provided to a Paraguayan IRE or IRP taxpayer, but not when the client is a foreign business. Business owners under the IRE have a separate rule that treats certain foreign activities as Paraguayan source unless foreign income tax at a similar or higher rate was paid. [source]DNIT (Direccion Nacional de Ingresos Tributarios), Ley 6380/2019 text“Las retribuciones por la prestación de servicios personales de cualquier naturaleza desarrollados fuera del territorio nacional por parte de contribuyentes de este Impuesto, siempre que tales servicios sean prestados a contribuyentes del IRE o del IRP.”View source · accessed 2026-10-26

Digital nomad visa in Paraguay

No (as of 2026)Base Legal (Paraguayan legal database), Ley 6984/2022 De Migraciones“Será otorgada por un plazo de hasta 2 (dos) años, prorrogables por igual período y será requisito previo al otorgamiento de la Residencia Permanente.”View source · accessed 2026-10-26 — Paraguay has no dedicated digital nomad visa: remote workers use the ordinary temporary residence under Ley 6984/2022, valid up to 2 years and extendable, which must come before permanent residence. An adviser site reports that DNM Resolution 407/2026 lists teleworkers and digital nomads as a way to prove economic solvency, which was not checked against the resolution text.

Permanent residence requirements
Permanent residence normally follows temporary residence, with no statutory deposit amount or minimum stay, and the card is renewed every 10 years. Investors can skip the temporary stage, and the MIC investment guide sets that route at a minimum USD 70,000 investment and five jobs. [source]Base Legal (Paraguayan legal database), Ley 6984/2022 De Migraciones“Los admitidos con Residencia Permanente perderán esta calidad si se ausentaren del territorio nacional por más de 3 (tres) años sin justificar su ausencia ante la Dirección Nacional de Migraciones.”View source · accessed 2026-10-26

Frequently asked questions

How many days can I spend in Paraguay before becoming tax resident?

120 days (as of 2026)PwC Worldwide Tax Summaries“An individual is deemed to be tax-resident in Paraguay if one spends more than 120 days in a year in the country.”View source · accessed 2026-10-26 — PwC says an individual who spends more than 120 days in a year in Paraguay is tax resident, and Ley 125/1991 article 152 uses the same 120 days only to presume a habitual residence for fiscal domicile. The DNIT instead defines a resident individual by a permanent residence permit, so treat the day count as a presumption and not as a standalone test.

What is the top personal income tax rate in Paraguay?

10% (as of 2026)PwC Worldwide Tax Summaries“10% equal to or greater than PYG 150,000,001.”View source · accessed 2026-10-26 — The top IRP rate on earned income is 10% on annual net income above PYG 150 million, and PwC reports no other income taxes such as a surcharge or local tax. The 9% employee IPS social security contribution is separate and is not included in the 10%.

Does Paraguay have a digital nomad visa?

No (as of 2026)Base Legal (Paraguayan legal database), Ley 6984/2022 De Migraciones“Será otorgada por un plazo de hasta 2 (dos) años, prorrogables por igual período y será requisito previo al otorgamiento de la Residencia Permanente.”View source · accessed 2026-10-26 — Paraguay has no dedicated digital nomad visa: remote workers use the ordinary temporary residence under Ley 6984/2022, valid up to 2 years and extendable, which must come before permanent residence. An adviser site reports that DNM Resolution 407/2026 lists teleworkers and digital nomads as a way to prove economic solvency, which was not checked against the resolution text.

Sources

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When to talk to an advisor

This page maps Paraguay’s general rules — it cannot weigh your treaty position, your family and asset ties, or the timing of a move. If meaningful money depends on the answer, have a qualified advisor in Paraguay (and in your home country) review your situation before you act.