Taxes in Paraguay

The national framework is based mainly on Law No. 125/1991, Law No. 6380/2019 and Law No. 7143/2023. The Ministry of Economy and Finance establishes the tax-policy framework, while the DNIT administers domestic and customs taxes. Paraguayan rules generally use the source of income: an activity carried out in Paraguay, or a property or right economically used in Paraguay, can create a Paraguayan tax obligation. Certain services supplied from abroad to an IRE or IRP taxpayer can also fall within Paraguayan taxation. Tax years normally follow the calendar year, although the administration can authorize another closing date in appropriate cases. IRE applies to economic activities in agriculture, commerce, industry and services. Its ordinary regime generally taxes net income at 10% and can apply to an Empresa Unipersonal, company, cooperative, foundation, state-owned company, branch, agency or permanent establishment. Tax losses may generally be carried forward for up to five years, subject to a maximum offset of 20% of future net income in each year. IRE SIMPLE is an optional regime for taxpayers whose previous-year turnover does not exceed G 2,000,000,000. It taxes the lower of the documented actual result and 30% of gross billings at 10%. An Empresa Unipersonal under IRE does not pay IDU on its own business withdrawals under the stated regime. IRE RESIMPLE is limited to an Empresa Unipersonal with previous-year turnover of no more than G 80,000,000. Its monthly payment is G 20,000 up to G 20,000,000 of turnover, G 40,000 up to G 40,000,000, G 60,000 up to G 60,000,000 and G 80,000 up to G 80,000,000. This regime requires sales documents, lawful purchase documents and tax declarations, does not include IVA and cannot be used for imports or exports. IDU applies when a company incorporated in Paraguay or a permanent establishment distributes profits, dividends or similar returns. The paying entity withholds the tax. The rate is generally 8% for a resident recipient and 15% for a non-resident recipient, including a foreign head office, with the withholding serving as a final payment for the relevant resident individual or non-resident. IRP applies mainly to resident individuals, undivided estates and specified special cases. Capital income and other gains are generally taxed at 8%. Personal services are taxed on net income at 8% up to G 50,000,000, 9% from G 50,000,001 to G 150,000,000 and 10% above G 150,000,001. Entry into the payment obligation for personal services begins when annual gross income exceeds G 80,000,000. A person below that threshold may still have filing duties without a payment obligation. IRP can also cover specified services performed abroad for an IRE or IRP taxpayer when the statutory connection to Paraguay exists. INR applies to individuals, companies and other entities that are not Paraguayan residents and do not have a permanent establishment in Paraguay when their income has a Paraguayan source. The general rate is 15%. Local payers, the State and municipalidades commonly withhold or collect the tax and can bear associated liability. For digital services supplied to final consumers, the regulatory calculation generally uses 30% of the amount excluding IVA as the tax base, followed by the 15% INR rate. Digital providers must register and file and pay monthly. In business-to-business transactions, an IRE customer generally withholds INR when the applicable rules require it. IVA covers the sale of goods, services other than dependent personal employment and imports. The monthly return compares IVA débito with IVA crédito. The 5% rate applies to specified categories such as residential rent, certain real-estate sales, defined basic food products, agricultural, horticultural and fruit products, livestock and primary derivatives, and human medicines. The 10% rate applies to other taxable cases. A tax credit requires a real, business-related and properly documented expense supported by a document containing the relevant RUC information. Excess credit is generally carried forward rather than refunded, except where a specific legal refund provision applies. Exporters may request a refund of eligible IVA credit. ISC applies to imports and the first domestic sale by manufacturers of selected goods. The categories include tobacco, beverages, high-calorie products, fuel and certain luxury or other specified goods. Rates vary by statutory product bands; for example, tobacco can fall within an 18% to 24% range and fuel can have a maximum rate of 50%. Municipalidades administer their own taxes under Law No. 3966/2010. These can include property tax, taxes on vacant land or large extensions, commercial, industrial and professional patents, vehicle taxes, construction, subdivision, real-estate transfers, advertising and games. Property tax uses a fiscal valuation under the relevant national valuation rules, while the amount, deadline and discounts can depend on the municipal ordinance. Paraguay has no separately established nationwide departmental tax structure of the same kind, although departments participate in property-tax revenue. The exact municipal obligation cannot be resolved without the municipality. A natural person or legal entity applies for a RUC electronically through Marangatu. The process can require digital identity, incorporation and representation evidence, together with a Clave de Acceso. The RUC records identifying information and tax obligations, and its status must remain activo while the taxpayer operates. Closing a RUC requires declarations through the end of activity, payment and customs clearance, a final declaration, cancellation of documents and no unresolved administrative or court proceedings. Taxpayers must issue and request sales documents, retain books, records and supporting documents until the applicable limitation period expires, and accompany the movement of goods with a nota de remisión or sales document. Prices must show IVA where applicable. SIFEN makes electronic invoicing progressively mandatory. DNIT General Resolution No. 52/2026 assigns groups 19 through 24 the dates 1 June 2026, 1 September 2026, 1 December 2026, 2 March 2027, 1 June 2027 and 1 September 2027. Public contractors are subject to electronic invoicing from 2 January 2026 under the stated schedule. The applicable group and any later DNIT instruction should be checked against the taxpayer’s RUC. Returns and payments are submitted electronically through Marangatu. The recurring monthly due date is calculated from the RUC ending digit without its check digit: 0 falls on the 7th, 1 on the 9th, 2 on the 11th, 3 on the 13th, 4 on the 15th, 5 on the 17th, 6 on the 19th, 7 on the 21st, 8 on the 23rd and 9 on the 25th. When the date is a holiday, the deadline moves to the next working day. IRE ordinary annual returns are generally due in the fourth month after the financial year, IRE SIMPLE in the third month, RESIMPLE in the second month with payments in March, June, September and December, and IRP in the third month. IVA and ISC returns are generally due in the following month. Informative returns follow the same RUC sequence one day later, from the 8th to the 26th. Late payment can trigger a fine, surcharge and interest under Article 171 of Law No. 125/1991. Marangatu may offer payment facilities or instalments under the current DNIT rules, but the applicable conditions and any charge must be checked for the specific tax. The DNIT can conduct an audit, determine a liability and open an administrative summary proceeding. A taxpayer can generally file a Recurso de Reconsideración through Marangatu within 10 working days from the day after service of the decision, followed by a Recurso de Apelación or Alzada within the applicable 10-working-day period. Tax claims generally prescribe five years from 1 January of the year after the relevant period, although interruption or suspension can change the calculation. A refusal of an IVA-credit refund can also be challenged. For cross-border income, a fiscal residence certificate from the DNIT may be needed to claim benefits under an applicable double-tax or transport agreement. DNIT materials list agreements or arrangements involving countries such as Chile, China, the United Arab Emirates, Uruguay and Qatar, as well as Germany, while Belgium and Argentina appear in transport-related arrangements. The inclusion of Spain in the DNIT legal register should be checked against the official current treaty list before relying on it. Treaty benefits are not automatic: residence, supporting documents and the specific article must all match. A foreign-tax credit for the same foreign income may be available up to the Paraguayan tax attributable to that income. Transfer-pricing rules require arm’s-length treatment for related-party foreign transactions and for certain domestic transactions where one party is exempt or does not file. Related-party information obligations, authorized professional involvement and record retention can also apply.