IRP Paraguay 2026: rates, timetable and who is liable

The Personal Income Tax (IRP) is, alongside IVA and IRE, one of the three pillars of Paraguay's post-reform tax system. Created by Law 6380/2019 on the Modernisation and Simplification of the National Tax System, today's IRP is a straightforward tax with low rates by regional standards and a design intended to encourage formalisation. In this guide we review the rates that apply in 2026, who is liable, the DNIT filing timetable and how deductions work.

Current legal framework

Law 6380/2019 consolidated several earlier taxes —the "old" IRP, IRACIS, IRAGRO, IRPC— into a three-tax architecture: IRE (companies), IRP (individuals) and INR (non-residents). Its main implementing regulation is Decree 3184/2019 and its subsequent amendments, supplemented by general DNIT resolutions.

From 2020 onwards the IRP has been structured into two chapters:

• IRP-RSP: Income and Earnings from Work (salaries, professional fees, high pensions).
• IRP-GC: Income and Capital Gains (sale of real estate, shares, dividends, taxable interest).

Both chapters are integrated into a single annual return but follow different deduction rules.

Progressive rates in 2026

The rates in force for IRP-RSP (income from work) are progressive:

• 8% on the first 50,000,000 guaraníes of taxable income per year.
• 9% on the band between 50,000,001 and 150,000,000 guaraníes.
• 10% on the excess over 150,000,000 guaraníes.

For IRP-GC the rate is flat: 8% on net capital gains, with a deemed regime of 30% of the transaction value where cost is not evidenced (in practice, 8% on 30% of the sale price = 2.4% effective).

For foreigners acquiring real estate in Paraguay, the deemed IRP-GC regime is generally more convenient than documenting cost on a line-by-line basis.

Non-taxable band and registration threshold

Anyone whose gross annual income in a tax year exceeds 80 monthly minimum wages for RSP must register for IRP. With the minimum wage currently around G. 2,800,000 per month, the threshold sits at roughly G. 224,000,000 per year (approx. USD 30,000 at the 2026 exchange rate — check the DNIT for the exact figure for the year).

Below the threshold there is no formal duty to register. Above it, you must register as a taxpayer with the DNIT (personal RUC) in the month following the one in which the threshold was crossed.

Who is liable

The following are subject to IRP:

• Individuals resident in Paraguay earning Paraguayan-source income above the threshold.
• Independent professionals: architects, doctors, lawyers, accountants, consultants, programmers invoicing on a fee basis.
• Directors and statutory auditors of companies, in respect of their remuneration.
• Partners receiving taxable distributions (dividends subject to the 8% IDU already withheld at source).
• Individuals who sell real estate, shares or partnership interests at a profit.

Not subject to IRP, by virtue of the territoriality principle:

• Residents whose income is exclusively foreign-sourced (overseas salaries, dividends from foreign companies, interest in offshore banks, content platforms, clients outside Paraguay).
• Residents with annual income below the threshold.

2026 filing timetable

Each January the DNIT publishes the perpetual calendar with deadlines based on the final digit of the RUC. For the tax year ended 31 December 2025, the annual return (Form 515) falls due on a staggered basis between March and May 2026:

• RUC ending in 0: first week of March 2026.
• RUC ending in 1 and 2: second and third weeks of March.
• RUC ending in 3 to 6: April 2026.
• RUC ending in 7 to 9: first two weeks of May 2026.

Advance payments are made every four months (May, September and the following January) on the basis of the previous year's tax. Consult the official perpetual calendar published at dnit.gov.py for exact dates by RUC final digit.

Allowable deductions

The following are deductible, subject to caps and supporting documentation:

• Personal and family expenses documented with an invoice in the taxpayer's name: education, health, clothing, leisure.
• Pension contributions (IPS, banking fund, medical fund).
• Private life and medical insurance.
• Interest on housing or personal consumer loans.
• Donations to recognised entities.

The overall deduction cap is 100% of taxable income: in practice, an individual with well-documented expenditure can end up paying close to 0% effectively in a given year.

Interaction with other taxes

IRP coexists with:

• The 8% IDU (Tax on Dividends and Profits), already withheld when the company distributes its profits: there is no further IRP charge on top.
• The IVA a professional pays on purchases — not creditable against IRP, but deductible as an expense.
• IRE: if the individual also runs a sole-trader business, IRE is due on the business activity and IRP on professional fees separately, where applicable.

See the full breakdown in our guide to the Paraguayan tax system.

Strategy for residents with mixed income

For those combining Paraguay with overseas income, the optimal design is usually:

• Keep foreign income outside the Paraguayan circuit (territoriality — not subject to IRP).
• Invoice from Paraguay only the local portion that justifies it, documenting deductions.
• If a corporate structure is needed, weigh up an SA/SRL under the 10% IRE or a service maquila at 1%.

Common mistakes

• Failing to register on crossing the threshold and incurring later penalties.
• Mixing business and personal expenses on the same invoice.
• Failing to retain electronic invoices (e-Kuatia) for the legal limitation period (5 years).
• Forgetting the four-monthly advance payment — the DNIT applies interest and surcharges for late payment without prior notice.
• Declaring dividends already taxed under the IDU as if they were taxable income — this generates unnecessary double taxation.
• Omitting a property sale from the same year: IRP-GC does not lapse simply with the passage of tax years.

Worked numerical examples

To anchor the concepts, let us look at three typical scenarios for 2026.

Case A — independent professional, resident

An IT consultant invoicing G. 400,000,000 per year for services to local clients, with documented expenses of G. 80,000,000 (coworking rent, services, equipment).

• Taxable base: G. 320,000,000.
• First G. 50,000,000 at 8%: G. 4,000,000.
• Next G. 100,000,000 at 9%: G. 9,000,000.
• Excess of G. 170,000,000 at 10%: G. 17,000,000.
• Total IRP: G. 30,000,000 (approx. USD 4,000, an effective rate close to 9.4%).

Case B — company director with dividends

A resident individual with gross director's remuneration of G. 180,000,000 and gross dividends of G. 500,000,000 from a Paraguayan SA.

• The dividends have already paid 8% IDU at source: G. 40,000,000 withheld. They are not taxed again under IRP.
• On the remuneration, after estimated deductions of G. 60,000,000, the taxable base is G. 120,000,000.
• First G. 50M at 8%: G. 4,000,000.
• Next G. 70M at 9%: G. 6,300,000.
• Total IRP on remuneration: G. 10,300,000.
• Combined burden (IDU + IRP): G. 50,300,000 on gross income of G. 680,000,000 (7.4% effective).

Case C — sale of real estate

An individual sells an apartment in Villa Morra for USD 220,000 (approx. G. 1,650,000,000 at the prevailing exchange rate). Purchase price 4 years earlier: USD 140,000 (G. 1,050,000,000). Actual gain: G. 600,000,000.

• Actual regime: IRP-GC 8% on G. 600M = G. 48,000,000.
• Deemed regime: 8% on 30% of G. 1,650M = 8% on G. 495M = G. 39,600,000.
• The deemed regime wins: a saving of G. 8.4M.

This calculation feeds into the purchase of real estate by foreigners when modelling the overall strategy.

Interaction with DTAs

Paraguay has double-taxation agreements (DTAs) with Chile, Uruguay, Taiwan, the United Arab Emirates and a small number of other countries. Where the taxpayer earns income from countries with no DTA —the majority— the territoriality principle applies: foreign income is not subject to IRP in Paraguay. If the country of origin withholds tax, that becomes a sunk cost for the Paraguayan resident (no credit is available for that tax).

Paraguayan-source criteria

The DNIT treats the following, among others, as Paraguayan-source income:

• Income derived from activities carried out in Paraguayan territory (including by non-residents, via INR).
• Income from assets located in Paraguay (rents, disposal of real estate).
• Dividends from Paraguayan companies.
• Interest on securities issued by Paraguayan entities.
• Royalties and consideration for the use of rights in Paraguay.

Income falling outside these categories is, in principle, foreign-sourced and not subject to IRP for the Paraguayan resident.

Formal obligations beyond the payment

• Registration with the DNIT with a specific IRP obligation activated.
• Income and expenditure ledger (physical or digital) supported by underlying records for each entry.
• Retention of electronic invoices issued and received for at least 5 years.
• Filing of Form 515 on time, even if the liability is nil.
• Asset declaration: initial filing and updates in line with DNIT regulations.

How it integrates with retirement

Contributions to IPS or parallel funds (banking, medical, professional, police, military) are deductible from IRP. Pensions received, when they exceed the exempt minimum, may be subject to IRP. For residents with overseas pensions, territoriality applies: they are not subject to IRP in Paraguay.

Relationship with foreign trade

An individual exporting professional services from Paraguay to overseas clients issues an electronic invoice with export treatment (no IVA) and counts the income as Paraguayan-source for IRP purposes. This integrates with the foreign-trade guide when the activity also involves goods.