Paraguay operates a territorial tax system with a competitive 10% corporate income tax rate (IRE). The standard VAT (IVA) is 10%, with a reduced rate of 5% on certain goods. Capital gains are taxed at 10%. Withholding tax applies to dividends paid to residents at 8%, while non-residents face a general 15% withholding rate on dividends, interest, and royalties. CIT returns are due by the end of the fourth month after the fiscal year-end, with quarterly advance payments required. Paraguay has no stamp taxes and maintains a straightforward tax structure aimed at attracting investment.
Paraguay Tax Brief
Time of Update 4/06/2026
Paraguay Corporate Income Tax (CIT)
Paraguay Withholding Tax (WHT)
Paraguay Value-Added Tax (VAT)
Paraguay Capital Gain Tax (CGT)
Paraguay Effective Tax Rate (ETR)
Composite Effective Marginal Tax Rate:
7.00%
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TKEG Expat ™ Paraguay Corporate Tax Guide
1.
Paraguay Value-Added Tax (IVA)
Paraguay imposes a Value-Added Tax (IVA) at a general rate of 10% on the sale of goods, provision of services, and imports. A reduced rate of 5% applies to basic consumer goods, pharmaceutical products, interest on loans, and the sale or lease of real estate. Exports are zero-rated. IVA is levied on a monthly basis, and taxpayers must file monthly returns.
2.
Paraguay Corporate Income Tax (IRE)
Paraguay applies a territorial tax system, taxing only income sourced within the country. The Corporate Income Tax (IRE) is levied at a standard rate of 10% on net taxable income. A simplified regime (IRE SIMPLE) is available for medium-sized companies with income up to PYG 2 billion, and a micro-enterprise regime (RESIMPLE) applies to sole proprietors with gross income up to PYG 80 million. CIT returns must be filed by the end of the fourth month following the fiscal year-end, with advance payments due quarterly.
3.
Paraguay Personal Income Tax (IRP)
Paraguay imposes a Personal Income Tax (IRP) at progressive rates of 8% and 10% on individual income sourced within the country. The IRP applies to Paraguayan-source income of resident individuals. Non-residents are subject to withholding tax on Paraguayan-source income at a general rate of 15%.
4.
Paraguay Capital Gains Tax
In Paraguay, capital gains are included in ordinary taxable income and subject to the standard 10% IRE rate for corporations. For individuals, capital gains are also taxed at 10% under the personal income tax (IRP) regime.
5.
Paraguay Withholding Tax (WHT)
Paraguay applies withholding tax on various types of income. Dividends paid to resident shareholders are subject to an 8% WHT. Non-residents face a general WHT rate of 15% on dividends, interest, royalties, and technical services. Paraguay has a limited treaty network, so reduced treaty rates are rarely available.
