Paraguay

Income from the provision of personal services

Paraguayan-source income from personal work, professional or not, provided by a resident as an employee or not, consistent in all kinds of consideration, remuneration, or income, whatever its name or nature, shall be considered as income from the provision of personal services.

Income from the following sources shall be included:

• Remuneration from the provision of independent personal services.
• Wages, salaries, bonuses, or travel assets not subject to accountability, and other remuneration in any concept, paid by individuals, public or private entities, binational entities, and autonomous assets to their representatives, officials, or employees in Paraguay or other countries.
• Wages, salaries, bonuses, and other remunerations of the members of the crew of aircraft, fluvial or maritime ships, and land vehicles, provided that such ships or vehicles have their home port in Paraguay or are registered in the country, regardless of the nationality or domicile of the beneficiaries of the income and the countries between which the traffic is performed.
• Remuneration, wages, commissions, travel expenses not subject to accountability, representation fees, gratuities, or compensations that entities with or without legal personality who reside in the country pay or credit to members of their boards, boards of directors, and other administration councils, or consultation or management bodies.
• Income from withdrawal incentive regimes established for public officials.
• Any other remuneration received in money or in kind in consideration of independent personal service and as an employee under the Labor Code.

Formal or accidental remunerations derived from personal work performed in a dependent or independent relationship, regardless of the beneficiary, is subject to PIT.

Capital gains

Capital gains include income and earnings from capital, in cash or in-kind, that come directly or indirectly from equity, goods, or rights, the ownership of which corresponds to the taxpayer of this tax.

It also includes positive variations in the value of the equity made by the taxpayer that do not come from income from the provision of personal services. Income from the following sources shall be included:

• Dividends, profits, surpluses, and any other benefits from the nature of the shareholder or member of companies incorporated in the country, excluding income taxed by the 
• Interests or income paid by individuals, legal entities, entities, or equities residing in the country from deposits of money; investment of money in financial instruments; credit transactions and contracts, such as opening credit, discount, letter of credit, or loans; the holding of negotiable instruments, such as promissory notes, drafts, bonds, or debentures, or the holding of other public or private securities; price differences in reporting operations, regardless of the name given to it by the parties, or other income earned from the assignment of own capital; and finance lease, factoring, asset securitisation, and any type of credit, financing, capital investment or savings operations.
• The income generated by transparent legal structures from financial returns, interest, recovery of assets, and assets from the execution of the fiduciary business or investments made, excluding income taxable by the IDU.
• Royalties received or arising from the rights used in Paraguay.
• The capital gains from the sale of rights, shares, or interests in an entity, resident or not, that grant its owner the right of enjoyment over movable or immovable property located in the Republic.
• The capital gains from the sale or assignment of the properties, which includes the lease, sublease, as well as the establishment or assignment of rights or powers of use or the likes thereof, whatever their name or nature.
• The capital gains from the sale or transfer of movable property, accountable or not, located in the country, or actual rights therein.
• Prizes of lotteries, raffles, draws, bingos, and similar events held in Paraguay.
• The free inclusion into the taxpayer's equity of movable or immovable property located in Paraguay or rights to be fulfilled or exercised in the country.
• The total or partial purchase of shares or capital shares of entities residing or established in the country, on the higher share of the capital contributed, as well as of the reserves, whatever their denomination, excluding income taxed by the IDU.
• Any unjustified increase in equity.