Paraguay Expat Tax: Territorial Tax & 10% Top Rate

Paraguay taxes only income from Paraguay, and the top rate on salaries and fees is 10%. Your foreign pension, foreign dividends and gains on investments held abroad aren't taxed at all.

This guide covers Paraguayan personal tax for the 2026 tax year, which is the calendar year: the territorial system, tax residence, the 8% to 10% rates, social security and residence permits.

The key question is simple. Was the income earned in Paraguay, or outside it?

What's changed: the rates in Law 6380 of 2019 haven't moved, so 2026 uses the same 8%, 9% and 10% scale. The tax authority is now the DNIT (Dirección Nacional de Ingresos Tributarios), created by Law 7143 of 2023 to replace the old SET. The treaty with Spain has been in force since 14 October 2024. Law 7300 of 2024 made stealing electricity to mine crypto a crime carrying up to ten years in prison. The guaraní has strengthened: the Central Bank's rate on 7 October 2026 was ₲5,752 to the US dollar, and this guide uses ₲5,750.

📋 Paraguay tax at a glance for 2026

The territorial system and the 10% top rate

What does Paraguay actually tax? The personal income tax (IRP) only reaches income from activities carried out in Paraguay and from assets or rights used there. Income from outside Paraguay is outside the tax, whether or not you live there.

Image 1 — Paraguay only taxes Paraguayan income, at 10% at most

The IRP has two separate parts:

• Income from work: salaries and fees, taxed at 8%, 9% or 10%.

• Capital income and gains: rent, interest, royalties and gains on Paraguayan assets, taxed at a flat 8%.

The law's list of capital income covers interest paid by Paraguayan residents, dividends from Paraguayan companies, royalties for rights used in Paraguay, and gains on assets located in Paraguay. So a foreign pension, a foreign brokerage account or a flat abroad all sit outside the IRP.

One twist: services you perform abroad count as Paraguayan-source when the client is a Paraguayan taxpayer. Work abroad for a foreign client stays foreign.

👉 Law 6380 of 2019 on Paraguay's tax system, Articles 47 to 70 on the IRP, Library of Congress (in Spanish)

Where does remote work fit?

If you live in Asunción and work for clients abroad, is that foreign income? On the law's wording, probably not. Paraguayan-source income comes from activities carried out in Paraguay, and the work happens where you sit. Expect that pay to be taxed at 8% to 10%.

When you become tax resident in Paraguay

The IRP applies to individuals, Paraguayan or foreign, who are resident in Paraguay. Neither Law 6380 nor its IRP regulation (Decree 3184 of 2019) sets a day count that we could find. Many advisers quote a test of more than 120 days in the year, but we couldn't confirm it in an official text, so check the current test with the DNIT.

In practice, movers get a residence permit and Paraguayan identity card (cédula), register for a taxpayer number (RUC) with the DNIT, and ask for a tax residence certificate if another country needs proof of the move.

The DNIT issues tax residence certificates under General Resolution 65 of 2020. Taxpayers need their RUC, an up-to-date tax record and a Paraguayan identity card. Non-taxpayers need the identity card and an immigration record of their entries and exits for the year.

A certificate doesn't stop your old country taxing you. If it still sees you as resident and has no treaty with Paraguay, there's no tie-breaker. Keep proof of where you actually live: your days, home, family and work.

👉 DNIT: General Resolution 65 of 2020 on tax residence certificates (in Spanish)

How you stop being resident

Leaving is simple. Paraguay has no exit tax and never taxed your foreign assets, so there's nothing to settle on them. Close your IRP obligations with the DNIT, file your last return, and keep evidence of when you left and where you went. Keeping a residence card after you leave may lead your new country to ask questions.

Income tax rates for 2026

Income from work, employed or self-employed, is taxed on this scale once your gross income from work in the year is more than ₲80 million.

Paraguay personal income tax rates on income from work in 2026

Source: Law 6380 of 2019, Articles 60 and 69. US dollar figures at ₲5,750 to the dollar.

The deductions are the real story

Paraguay's IRP lets you deduct ordinary living costs, not just business expenses. With proper invoices you can deduct:

• food, clothing, rent, home upkeep, furniture and leisure spent in Paraguay

• health and education for you and your dependants, in Paraguay or abroad

• one car every three years and one home every five years

The spending has to be paid from taxable income of the same year, a loan, or taxed income from the previous five years. Spending paid with foreign or exempt income doesn't count, and only a home purchase can create a loss to carry forward. Your own IPS contributions are left out of your income altogether.

👉 DNIT: frequently asked questions on the IRP (in Spanish)

Worked example

• You're single and take a job in Asunción in 2026 paying ₲575 million (about US$100,000).

• You pay 9% IPS, ₲51.75 million. It's left out of your income, so ₲523.25 million is subject to IRP.

• With no deductions, your income tax is ₲50.3 million: 8% on the first ₲50 million, 9% on the next ₲100 million and 10% on the rest.

Your all-in bill is about ₲102.1 million, or 18% of your salary. Deduct ₲180 million (about US$31,300) of documented living costs and income tax falls to ₲32.3 million, an all-in bill of about ₲84.1 million, or 15%.

The legally required thirteenth-month bonus is exempt from the IRP, so the exact figure depends on how your pay is structured.

Freelancing in Paraguay

Self-employed people use the same scale. On ₲575 million (about US$100,000) of Paraguayan-source fees with no deductions, the IRP is ₲55.5 million, or 9.7%. Business costs and the personal costs above are deductible, so most freelancers pay less.

Social security isn't compulsory for the self-employed. You can join the IPS pension fund voluntarily at 13% of an income you choose, at least one minimum wage. It covers pensions only, not IPS medical care.

Fees for work you do while living in Paraguay are likely to be Paraguayan-source, even if every client is abroad. Check too whether your services fall within IVA, the value added tax, at the general rate of 10%, when you register.

👉 Law 4933 of 2013: voluntary IPS pension cover for self-employed workers, Library of Congress (in Spanish)

Crypto, investments and pensions

How is crypto taxed in Paraguay? There's no specific law and no DNIT guidance. Capital gains are only taxed when the asset is located in Paraguay, so a gain on crypto held on a foreign exchange is generally outside the tax. A Paraguayan gain would be taxed at 8%.

Mining is where the law has moved. Under Law 7300 of 2024, taking electricity irregularly to mine crypto carries up to ten years in prison.

👉 Law 7300 of 2024 on electricity theft and crypto mining, Library of Congress (in Spanish)

For investments, the line between foreign and Paraguayan decides everything:

• Foreign portfolio: dividends, interest and gains from investments held outside Paraguay aren't taxed.

• Dividends from Paraguayan companies: the company withholds dividend tax (IDU) of 8% for residents and 15% for non-residents.

• Interest in Paraguay: interest on deposits with Paraguayan banks and savings cooperatives is exempt, as are gains on securities traded on Paraguay's stock exchanges.

• Gains on Paraguayan property and shares: taxed at 8% on the lower of 30% of the sale price or your actual gain. That caps the tax at 2.4% of the price. Sales of movable goods totalling ₲20 million or less in a year are exempt.

• Rent from Paraguayan property: 8% on either half the rent or the rent less documented costs. At most, 4% of the rent.

A pension paid from abroad is foreign-source, so Paraguay doesn't tax it, though the paying country may.

Paraguay has no wealth tax and no separate inheritance or gift tax. Paraguayan assets you inherit or receive as a gift count as capital income, but only when you later sell them.

Social security

If you're employed in Paraguay, you're covered by the Instituto de Previsión Social (IPS), which runs both pensions and healthcare:

• Employee: 9% of your salary, deducted by your employer.

• Employer: 14% of your salary on top, paid to the IPS.

Law 98 of 1992 sets no upper limit on the salary these apply to, and your 9% is left out of your income for IRP. Employers may also pay other payroll charges. The self-employed aren't covered automatically.

👉 Law 98 of 1992 on the IPS pension system, Article 2 setting the contribution rates, Library of Congress (in Spanish)

Double tax treaties

Does Paraguay have double tax treaties? Yes, but very few. The DNIT lists comprehensive income tax treaties, each approved by law, with Chile, Taiwan, the United Arab Emirates, Uruguay and Qatar, and the treaty with Spain has been in force since 14 October 2024. That makes six, plus some agreements on international transport. Check that a treaty is in force for the year you need before relying on it.

There's no comprehensive treaty with the UK, the United States, Germany, Brazil or Argentina, so most movers have no tie-breaker if their old country still claims them. Leaving cleanly matters more than usual.

👉 DNIT: international tax agreements (in Spanish)

👉 DNIT: the Paraguay and Spain double tax treaty, in force since 14 October 2024 (in Spanish)

Residence permits: the practical long-stay route

Paraguay doesn't have a digital nomad visa: we found none on the immigration service's site or in the Migration Law, Law 6984 of 2022. Most people use ordinary residence.

Paraguay residence permits for expats in 2026

Foreign documents must be apostilled and translated into Spanish. Migraciones updated its rules on proof of economic solvency and its permanent residence requirements in 2026, so check the current list before you apply. MERCOSUR nationals have their own route.

👉 Law 6984 of 2022 on migration, Articles 46 to 52 on residence, Library of Congress (in Spanish)

👉 SUACE: requirements for the foreign investor certificate (in Spanish)

👉 Ministry of Industry and Commerce: how residence for foreign investors works (in Spanish)

Who is Paraguay good for?

Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including IPS contributions.

☑️ Who is Paraguay good for? Tax ratings for expats in 2026

Filing and deadlines

The tax year is the calendar year. The annual IRP return is due by the due date in the third month after the year ends, so the 2026 return is due in March 2027. The exact day, between the 7th and the 25th, depends on the last digit of your RUC under the DNIT's permanent calendar. If it falls on a weekend or holiday, it moves to the next working day.

If your gross income from work is ₲80 million or less, you still meet the filing rules but pay no IRP on it. Keep every invoice for the expenses you deduct.

👉 DNIT: filing deadlines and the permanent due date calendar (in Spanish)

Frequently asked questions

Does Paraguay tax foreign income?

No. Paraguay's personal income tax only reaches income from activities in Paraguay and assets located there. Foreign pensions, dividends, interest and gains aren't taxed, even if you're resident.

What are the income tax rates in Paraguay in 2026?

Income from work is taxed at 8% on net income up to ₲50 million, 9% up to ₲150 million and 10% above that. Capital income and gains on Paraguayan assets are taxed at a flat 8%. You pay nothing on income from work if your gross income from it is ₲80 million or less.

I work remotely from Paraguay for foreign clients. Is that foreign income?

Probably not. Income from activities carried out in Paraguay is Paraguayan-source, and remote work is carried out where you sit. Expect 8% to 10%, less deductible living costs.

How do I get a Paraguayan tax residence certificate?

You apply to the DNIT with your RUC, an up-to-date tax record and a Paraguayan identity card, or, if you're not a taxpayer, the identity card and an immigration entry and exit record for the year. It doesn't end residence in your old country by itself.

Is a foreign pension taxed in Paraguay?

No. A pension paid from outside Paraguay is foreign-source, so Paraguay doesn't tax it. The paying country may still tax it.

How many double tax treaties does Paraguay have?

Six comprehensive income tax treaties: Chile, Taiwan, the United Arab Emirates, Uruguay, Qatar and Spain. There's no comprehensive treaty with the UK, the United States, Germany, Brazil or Argentina.