Paraguay

Overview

Last reviewed - 11 February 2020

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 2018, mainly due to record agricultural production and the recovery of international markets for the export of beef, mainly. In 2018, Paraguay achieved a growth of approximately 4.2%, which would position the country as one of the most significant in terms of the percentage of real GDP growth 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 sixth largest producer of soybeans, and the ninth largest in soybean processing capacity . Paraguay is also the ninth largest exporter of beef in the world.

In the structure of the GDP, the industrial sector is the most significant, with about 20% of weight; however, a large percentage of the industry's participation is agro-industries, hence the country's dependence on the primary sector.

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 service, taxability 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 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. PwC Paraguay has an important expertise in the assistance of agribusiness.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

10

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 (%)

10

Personal income tax (PIT) due dates
PIT return due date

March

PIT final payment due date

March

PIT estimated payment due dates

NP

Value-added tax (VAT) rates
Standard VAT rate (%)

10

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: NA;

Non-resident: 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
Corporate capital gains tax rate (%)

Capital gains are subject to the normal CIT rate.

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 (%)

NP

Inheritance and gift tax rates
Inheritance tax rate (%)

NP

Gift tax rate (%)

NP

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.