Practical guide

Paraguay Taxes for Expats: What “10-10-10” Actually Means in 2026

Paraguay taxes income earned in Paraguay. The catch for remote workers: work done at a desk in Asunción counts. Here are the real rates behind 10-10-10, under Law 6380/2019. General information, not tax advice on your return.

High-rise skyline of Villa Morra, Asunción's financial district — Villa Morra, the financial district. Book an accountant before tax season: the annual IRP return is due in March. Photo: Cmasi / Wikimedia Commons, CC BY-SA 4.0

Territorial taxation: the part that's true

Law 6380/2019 taxes income of Paraguayan source: income from activities carried out in Paraguay, from assets located here, or from rights used economically here. Nationality plays no part in it.

So a dividend from a foreign company, rent on a foreign apartment, a foreign pension or interest on a foreign bank account falls outside the Paraguayan income taxes. There is nothing to apply for: that income is simply not in scope.

The real rates behind the slogan

Personal income tax (IRP). On income from personal services, the rates are 8% on net income up to ₲50 million, 9% from ₲50,000,001 to ₲150 million, and 10% above ₲150 million. If your gross income from personal services stays at or below ₲80 million in the year, you owe no IRP, though a registered taxpayer still files. Capital income (local rent, local interest, local capital gains) pays a flat 8%. The annual IRP return is due in March.

Company tax (IRE). 10% of net profit on Paraguayan-source business income.

VAT (IVA). 10% on most sales and services. The 5% rate covers rent on property used only as a home, and a basic basket: rice, pasta, vegetable oil, yerba mate, milk, eggs, flour and iodized salt. You pay IVA inside shop prices whether or not you ever register.

Two taxes the slogan leaves out:

IDU, on dividends and profits paid by a Paraguayan company: 8% when the person receiving them is resident in Paraguay, 15% when not.
INR, on Paraguayan-source income earned by non-residents: 15%.

Historic white Ministerio de Hacienda building with corner cupola in downtown Asunción — The historic Ministerio de Hacienda building, downtown. Tax administration moved to DNIT in 2023, so old forms that say SET are out of date. Photo: Paraguayo1982 / Wikimedia Commons, CC BY-SA 4.0

The remote-work question: where the work happens

The law's source rule looks at where the activity is carried out. Work you do at a desk in Asunción is an activity carried out in Paraguay, even when the client and the payment are abroad. A foreign pension, foreign dividends and foreign rent don't raise this question. Remote work done here does.

If you live here and work for foreign clients, this is the one question worth paying a local accountant to answer on your facts.

Your residency card is not a tax registration

Immigration and tax run through different offices. Residency comes from Migraciones. Tax registration comes from DNIT, the Dirección Nacional de Ingresos Tributarios, which Law 7143/2023 created by merging the old tax office (SET) with Customs.

Getting a RUC: the taxpayer number

The RUC is your taxpayer ID. DNIT's step-by-step guide works like this:

Apply online and attach your documents digitally.
Identify yourself with a Paraguayan cédula, a passport or a migration card. With a passport or migration card, you type your details in by hand.
Scan the ID on both sides, plus a clear color photo of yourself holding it.
Then take the physical documents to a DNIT office in person.

Registering creates filing duties, so register when you need a RUC (to invoice locally, run a company or employ people), not before.

Your home country still counts

Paraguay leaving your foreign income alone does not mean your home country does. The United States, for one, taxes its citizens on worldwide income wherever they live. Check your home country's rules before you count on a lower bill.

When you need an accountant

Hire one if any of these apply: you work from Paraguay for foreign clients; you run a Paraguayan company, charge IVA or employ people; you are selling local property; or a foreign bank or tax authority has asked for Paraguayan tax filings.

Reverse of a Paraguayan 1 guaraní coin showing a soybean plant — A 1 guaraní coin from 1988. Tax thresholds are set in guaraníes, so convert at the day's rate, not last year's. Photo: Sacerdos Caesarum / Wikimedia Commons, CC0

Misconceptions that won't die

"Foreign client means foreign income." Not if you do the work in Paraguay.
"10-10-10 means every tax is 10%." Personal-services income runs 8%, 9% and 10%; local capital income is 8%; dividends are 8% or 15%; part of IVA is 5%.
"SET handles this." DNIT does, since Law 7143/2023.
"Paraguay replaces my home-country return." It doesn't. US citizens are the clearest case.

FAQ

Does Paraguay tax foreign income?

Paraguay's income taxes apply to Paraguayan-source income: activities carried out in Paraguay, assets located here and rights used here. Foreign dividends, pensions, rent and interest fall outside them. Remote work you perform while living in Paraguay counts as an activity carried out here.

What is the income tax rate in Paraguay?

For personal services, IRP is 8% up to ₲50 million of net income, 9% up to ₲150 million and 10% above, with nothing owed until gross income passes ₲80 million in the year. Local capital income pays 8%, company profit (IRE) 10%, and VAT is 10% with a 5% rate for home rent and basic foods.

Do I need a RUC as an expat in Paraguay?

Only if you need to invoice locally, run a company or employ people. DNIT accepts a cédula, a passport or a migration card to register, and registering creates filing duties.

Ask around before you pay for answers. Join Open Asu on WhatsApp and ask who people use for their taxes.