Paraguay, a landlocked country in South America, is bordered by Brazil to the east, Argentina to the southwest, and Bolivia to the northwest. It consists of 17 departments, with a separate district for the capital city of Asunción. The official languages of Paraguay are Spanish and Guaraní, and the currency is the guaraní (PYG).
Paraguay achieved a significant economic expansion in Latin America in recent years. After an economic contraction of 1.2% of the gross domestic product (GDP) in 2012, the Paraguayan economy showed a recovery between 2013 and 2019, mainly due to record agricultural production and the recovery of international markets for the export of beef, mainly.
Regarding the 2020 period (affected by the COVID-19 pandemic), a GDP contraction of 1% is estimated according to data published by the Central Bank of Paraguay. The sectors affected being industry and services, mainly the latter. Due to the participation of the agricultural sector in GDP, Paraguay became one of the countries with the lowest GDP contraction in the region.
Paraguay stands out as the leading exporter of renewable electricity in South America and is among the largest net exporters of clean energy worldwide. In addition, according to data published by the United States Ministry of Agriculture, Paraguay ranks as the largest exporter of organic sugar in the world, the fourth largest soybeans exporter, and the tenth largest in soybean processing capacity. Paraguay is also the tenth largest exporter of beef, eighth largest corn exporter, and eleventh largest rice exporter in the world.
In Asuncion, in the central region, commercial activities (imports, exports, related services) and financial services have developed significantly.
Paraguay has achieved an important participation in the capital gains markets with the placement of national bonds, due to the macroeconomic stability achieved over the years that mainly includes sustained economic growth, fiscal discipline, and accumulation of international reserves, among others.
It is important to mention that, as of 1 January 2020, a new tax reform is in force. It includes certain changes, such as the extension of the source or territoriality principle, taxation of digital services, and transfer pricing rules, among others.
Finally, within the demographic statistics it is highlighted that the population of Paraguay is approximately 7.2 million people, of which 48% are economically active. The middle class has increased by 45% and represents approximately 24% of the total population (1.5 million people).
PwC Paraguay assists the principal multinational companies and financial institutions in Paraguay. We support clients with the local knowledge and skills of our people and with access to a broad range of other professionals across the PwC global network of firms.
PwC Paraguay has a branch in Hernandarias, Alto Parana, in the east zone of the country, where the primary area of soy crops, maquila industries, and agricultural industries are located.
|Corporate income tax (CIT) rates|
|Headline CIT rate (%)||
|Corporate income tax (CIT) due dates|
|CIT return due date||
By the fourth month following the end of the fiscal year.
|CIT final payment due date||
On varying days in the fourth month following the end of the fiscal year (depending on taxpayer ID number).
|CIT estimated payment due dates||
May, July, September, and November.
|Personal income tax (PIT) rates|
|Headline PIT rate (%)||
|Personal income tax (PIT) due dates|
|PIT return due date||
|PIT final payment due date||
On varying days in March (depending on taxpayer ID number).
|PIT estimated payment due dates||
|Value-added tax (VAT) rates|
|Standard VAT rate (%)||
10 (5% for sale and rent of immovables, some medicines, and agricultural, horticultural, and fruit products)
|Withholding tax (WHT) rates|
|WHT rates (%) (Dividends/Interest/Royalties)||
Resident: 8 / NA / NA
Non-resident corporations: 15 / 6 (bank and financial institutions), 15 (commercial entities), 30 (head office or direct shareholder) / 15 (commercial entities), 30 (head office or direct shareholder)
|Capital gains tax (CGT) rates|
|Headline corporate capital gains tax rate (%)||
Capital gains are subject to the normal CIT rate.
|Headline individual capital gains tax rate (%)||
Capital gains are subject to the normal PIT rate.
|Net wealth/worth tax rates|
|Headline net wealth/worth tax rate (%)||
|Inheritance and gift tax rates|
|Headline inheritance tax rate (%)||
|Headline gift tax rate (%)||