Paraguay — Taxes

Territorial tax, and famously simple Paraguay taxes on a territorial basis: income earned outside Paraguay is not taxed. On top of that, the local system is unusually simple — broadly a 10% personal income tax, 10% corporate tax and 10% VAT, the so-called “triple ten”. For a foreign-income earner, the effective Paraguayan tax bill can be very low.

Local income and consumption Paraguayan-source income is taxed at a flat 10% (personal) and 10% (corporate); VAT is 10%. These are among the lowest mainstream rates in the region — but they apply only to what is earned or consumed inside Paraguay.

What is not taxed There is no wealth tax and no inheritance tax, and foreign-source income is outside the net entirely.

Residence, tax residence and a fast passport A residence permit does not by itself make you Paraguay tax-resident, and it does not remove obligations to a country that taxes on citizenship, such as the United States. Paraguay’s real distinction is speed: permanent residence in about three months and eligibility for citizenship after just three years — though naturalisation is discretionary and expects genuine ties. If a low-tax base with a short citizenship horizon is the goal, compare it with the territorial option of Panama, read our tax hub and residency hub, and see how each figure is checked in our methodology.