Paraguay's tax system is relatively simple compared to other countries in the region. Law 6380/2019 (in force since January 2020) completely modernized the fiscal structure, replacing IRACIS with IRE.
Main taxes
IRP — Personal Income Tax
For individuals. Progressive: 8%, 9%, max 10%. Minimum threshold: G. 80 million/year. Only Paraguayan-source income.
IRE — Corporate Income Tax
For legal entities. Flat rate of 10% on net income. Replaced IRACIS as of 01/01/2020.
VAT — Value Added Tax
General rate: 10%. Reduced rate: 5% for basic food items, medicines and medical services.
What does NOT exist in Paraguay
- Inheritance or estate tax
- Wealth tax
- Foreign exchange controls
- Tax on foreign-source income (territorial principle)