The IRP (Personal Income Tax) is Paraguay's tax on individual income. Regulated by Law 6380/2019, it exclusively taxes income from Paraguayan sources.
Rates and minimum threshold
- 8% on annual net income up to G. 50,000,000
- 9% on the portion between G. 50,000,001 and G. 150,000,000 annually
- 10% on amounts exceeding G. 150,000,000 annually
A non-taxable minimum is defined by the DNIT based on the legal minimum wage (approximately G. 80 million/year, ~USD 11,000). If your Paraguayan income is below this threshold, you are not required to file IRP.
What income is NOT included?
- Dividends from LLCs or other foreign-incorporated companies
- Capital gains and investments made outside Paraguay
- Rental income from real estate located abroad
Thanks to the territorial principle, Paraguay only taxes income from Paraguayan sources. Important: freelance or professional services physically performed from Paraguay (even if billed abroad) may be classified as Paraguayan-source income under the law and DNIT's criteria. The qualification depends on the specific case.
Need advice on your specific tax situation? Contact a certified accountant in Paraguay.