Paraguay

Individual - Taxes on personal income

Last reviewed - 31 May 2024

Individuals with residence in Paraguay and/or abroad are taxable on Paraguayan-source income.

Personal income tax rates

It taxes the income obtained by individuals:

The following shall include:

  • Income and capital gains, excluding those taxed by the IDU.
  • Income from the provision of personal services

The tax on those incomes is settled separately.

Source

The Paraguayan-source income provided for in the previous article, from activities carried out in the Republic, from assets located or of rights used financially therein, shall be affected by this tax.
The following shall also be considered to be from a Paraguayan source:

  1. The returns of the investment income originating from deposits, loans, and in general in any placement of capital or credit of any nature in the country.
  2. Remuneration for the provision of personal services, as an employee or not, that the State pays or credits to taxpayers of this tax.
  3. The remuneration for the provision of personal services of any nature performed outside the country by taxpayers of this Tax, provided that such services are provided to IRE or IRP taxpayers.

Taxpayers
Nationals or foreign individuals residing in the country shall be taxpayers.

Likewise, the following shall be taxpayers:
1. Undivided inheritances

2. Parents, guardians, or curators for the income earned by those under their legal custody, guardianship, or curatorship.

3. Paraguayan nationals for their status as:

a) Members of Paraguayan diplomatic missions, including the head of the mission and members of the diplomatic, administrative, technical, or service personnel thereof

b) Members of Paraguayan consular offices, including the head of the consular offices and the services official or personnel. Honorary consuls or consular agents and their dependent staff are exempted.

c) Members of delegations and permanent representations of Paraguay, certified before international bodies or part of delegations or observer missions abroad

d) Officials or contracted personnel who provide services abroad, who are not diplomatic or consular, unless they prove their tax residence in the country where they serve.

Foreigners who meet the conditions established in this item and who have their usual residence in the country shall not be taxpayers of this tax, on the condition of international reciprocity,