{"id":1665,"date":"2024-02-09T09:27:50","date_gmt":"2024-02-09T09:27:50","guid":{"rendered":"https:\/\/orderoffshore.com\/?p=1665"},"modified":"2026-03-11T07:55:32","modified_gmt":"2026-03-11T07:55:32","slug":"paraguay-adozas","status":"publish","type":"post","link":"https:\/\/orderoffshore.com\/en\/paraguay-taxation\/","title":{"rendered":"Paraguay taxation"},"content":{"rendered":"

Paraguay taxation: advantages, what to know, costs<\/h1>\n\n\n\n

Many people aspire to live abroad, and there is a growing expectation that the ideal country should not only be culturally and environmentally attractive, but also have a favourable tax regime. One example is Paraguay, which has the most favourable tax regime of the Mercosur countries. Find out who can benefit from Paraguayan taxation and how much tax you have to pay as an individual, company or digital nomad.<\/p>\n\n\n\n

Paraguay taxation: who can benefit?<\/h2>\n\n\n\n

Paraguay's low tax rates, fast-growing economic environment and simple administrative processes all contribute to making the country an attractive destination for both business and self-employment. <\/p>\n\n\n\n

You can also set up a company in Paraguay as a foreigner. <\/strong>Setting up a business in Paraguay is considered easy worldwide, and running your business is cheap.<\/p>\n\n\n

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\"Paraguay<\/a><\/figure><\/div>\n\n\n

Image title: bird's eye view of the capital of Paraguay<\/p>\n\n\n\n

Source: freepik.com<\/p>\n\n\n\n

Resettlement in Paraguay<\/strong><\/a> as a foreigner, your income outside the country is tax-free. A <\/strong>your income from abroad remains tax-free even if you are not in the country.<\/strong> This is why Paraguayan taxation is particularly popular among digital nomads.<\/p>\n\n\n\n

Paraguay taxation: returns and expenses<\/h2>\n\n\n\n

Paraguay taxation has changed since 2020. Basically, as a Paraguayan taxpayer, corporate tax, personal income tax and VAT rates are 10%.<\/p>\n\n\n\n

Tax<\/strong><\/td>Paraguay<\/strong><\/td>Hungary<\/strong><\/td><\/tr>
SZJA<\/td>10% (over 13 000 $ per year)<\/td>15%<\/td><\/tr>
TB<\/td>None<\/td>18,5% <\/td><\/tr>
SZOCHO<\/td>None<\/td>13%<\/td><\/tr>
Corporation tax<\/td>10% (over 80 million PYG)<\/td>9% (no income limit)<\/td><\/tr>
Dividend tax<\/td>5%<\/td>15% and in some cases SZOCHO<\/td><\/tr>
Inheritance tax<\/td>None<\/td>Have<\/td><\/tr>
Business tax<\/td>None<\/td>0-2% depending on location<\/td><\/tr>
VAT<\/td>10%<\/td>27%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Corporation tax<\/h3>\n\n\n\n

The corporate tax in Paraguay is 10%. If your company's annual income is less than 80 million guarani (PYG), which is currently HUF 3.9 million, you are subject to a preferential tax regime. Under this scheme, you pay a fixed amount per month according to a payment schedule set by the tax authorities. The monthly tax amount can vary from PYG 20 000 to PYG 80 000, depending on your previous year's income, as determined by the tax authority. The tax is payable quarterly, half-yearly or annually.<\/p>\n\n\n\n

Taxation of sole proprietorships<\/h3>\n\n\n\n

In Paraguay, there is no special tax for self-employed people. If you start a business, you will also have to pay personal income tax 10% if your annual income is below 80 million guarani (PYG). This limit in HUF is currently HUF 3.9 million. Below this, the Paraguayan tax authorities will assess your tax on a monthly basis, which can be between PYG 20 000 and PYG 80 000.<\/p>\n\n\n\n

In Hungary, on the other hand, you can opt for a fixed monthly KATA tax or be a flat-rate taxpayer. In case of a flat-rate tax, you will also have to pay 15% SZJA, 13% SZOCHO and 18,5% TB. Add to this that the part of your income not exceeding half of the annual minimum wage is exempt from tax. This is HUF 1 600 800 in 2024.<\/p>\n\n\n\n

SZJA<\/h3>\n\n\n\n

In Paraguay, you only have to pay income tax of 10% if your monthly income exceeds 36 times the minimum wage, which is currently 13 000 $ per year.<\/p>\n\n\n\n

Dividend tax<\/h3>\n\n\n\n

If you own a company and receive dividends or buy shares in a company that pays dividends, you will pay 5% tax on the dividends you receive.<\/p>\n\n\n\n

There are no additional local taxes in Paraguay, such as business tax. However, you will be taxed on the income from the purchase of your property in the same way as in Hungary.<\/p>\n\n\n\n

Paraguay taxation procedure<\/h2>\n\n\n\n

You should be aware that there is no double taxation agreement between Hungary and Paraguay.<\/strong> Thus Paraguayan taxation does not always exempt you from paying tax in Hungary. Before making a decision on taxation and establishment, it is always advisable to seek advice from a team of experts with a wide range of experience in both establishment and taxation.<\/p>\n\n\n

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\"Paraguay<\/a><\/figure><\/div>\n\n\n

Image title: tax expert at work<\/p>\n\n\n\n

Source: freepik.com<\/p>\n\n\n\n

Paraguay taxation for individuals<\/h3>\n\n\n\n

In Paraguay, the following income may be subject to personal income tax at the time of the annual return:<\/p>\n\n\n\n