Paraguay · Tax regime
Paraguayan Territorial Tax System
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Last verified July 2026
Ley 6380/2019 restructured Paraguay's tax code and kept strict territoriality in place. IRP reaches Paraguayan-source income only. Foreign-source income sits outside its scope entirely.
Paraguay combines a 10% headline rate, strict territoriality, no wealth tax, no inheritance tax and no CFC rules, all at a fraction of Panama's cost and without Panama's EU blacklisting. For a family whose income is entirely foreign-source, it is arguably the most efficient base in the hemisphere, provided they can tolerate Asunción.
Qualifying routes
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Tax residency
Generally 120+ days of presence, or obtaining a RUC and filing. A DNIT tax residency certificate requires substantiation.
The facts
- Total landed cost
- Nominal. RUC registration and accounting compliance run a few hundred dollars a year.
- Route type
- Tax regime, not a visa
- Timeline
- 1–4 months (Obtaining a RUC is fast. A tax residency certificate takes longer and requires evidence.)
- Physical presence
- Presence supports the claim, but a certificate that a treaty partner will respect requires real substance.
- Family
- No one
- Permanent residency
- Not applicable
- Citizenship
- Not applicable
- Language test
- Not applicable
- Dual citizenship
- You keep any citizenship you held before naturalising. Paraguay does not require you to give it up.
- Requirements
- RUC registration with DNIT for a defensible positionpresence and substance proportionate to what you need the certificate to withstand
What can go wrong
- A Paraguayan cédula is not tax residency. Paraguay's residency programmes require almost no presence, but a DNIT tax residency certificate that another country's revenue authority will actually respect requires substance you must build deliberately.
- Paraguay's treaty network is very thin, which limits your ability to defend the position against an aggressive former home jurisdiction. Territoriality plus no treaty is a weaker combination than it looks.
- Paraguay is a CRS participant and exchanges financial account information.
- Banking in Paraguay is functional but provincial. Moving eight figures through Paraguayan institutions is slow and invites correspondent-bank questions.
- Distinguishing Paraguayan-source from foreign-source income becomes contentious once you are physically working from Asunción. Income earned by your labour while sitting in Paraguay is Paraguayan-source, whoever pays it.