With its low cost of living, relaxed lifestyle, and investor-friendly policies, Paraguay is fast becoming a go-to destination for expats seeking a simpler, more affordable life in South America.
In this guide, we’ll walk you through everything you need to know about relocating to Paraguay from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Paraguay follows a territorial taxation model. You will pay tax on local sourced incomes only, irrespective of your resident status.
if you are present in Paraguay on more than 120 days during the tax year.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in the Paraguay, you may find that the source country, as a starting point, continues to tax the income.
Double taxation agreements may remove the source country’s taxing right and thus, enable you to receive incomes tax free globally.
At present, Paraguay has five double taxation agreements signed.
