Paraguay

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.

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.

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%.

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.

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.