Tax
The 10-10-10 model: 10 percent corporate, VAT and personal tax
Paraguay is known for the simplicity and low level of its taxes. Ley 6380/2019 consolidated the system: corporate income tax (IRE) at 10 percent, VAT (IVA) at 10 percent with a reduced 5 percent rate, and personal income tax (IRP) at 8 to 10 percent. Dividends attract a separate distribution tax. Taxation is territorial in principle.
Key rules
- Jurisdiction — National, with municipal patents and property rates
- Deadline — IRE annual return: within four months of financial year end
- Deadline — IVA: monthly by taxpayer-number calendar
Governing law
- Ley 6380/2019 - Modernización y Simplificación del Sistema Tributario
- Ley 125/1991as amended
In practice
The flat 10 percent structure across the main taxes, combined with largely territorial taxation of income, is Paraguay's principal investment-attraction argument and is genuinely simple compared with Brazilian or Argentine complexity. Ley 6380 also introduced transfer-pricing rules, which had previously been absent, so cross-border related-party pricing now requires documentation.