Paraguay

{"ftc_utility":"low","fbar_trigger_notes":"Paraguay requires no mandatory local bank account for residents. However, many expats open accounts at local banks such as Banco Continental or Banco Itau Paraguay. Any Paraguayan bank account holding over USD 10,000 at any point during the year triggers US FBAR (FinCEN 114) filing requirements. FATCA compliance by Paraguayan banks is limited - US expats should not assume non-reporting.","ftc_utility_reason":"Paraguay's territorial tax system means most foreign-source income earned by US expats living in Paraguay is not taxed locally. Since no Paraguayan tax is paid on US-source income or most foreign income, there is little to no Paraguayan tax liability against which to claim US Foreign Tax Credits. The FEIE is generally more useful for US expats in Paraguay than the FTC.","presence_day_count_notes":"Paraguay does not impose strict entry/exit day limits for tourist or temporary resident visa holders that would typically interrupt a 330-day count, though extensions may be required for longer stays. Permanent residents and citizens have no such concerns. Some expats enter on successive 90-day tourist visas while establishing residency, which can create complications for establishing bona fide residence.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":7200,"local_tax_rate_on_earned_income":0,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign-source pension income is outside Paraguayan territorial tax scope. Only Paraguayan-source pension income would potentially be subject to IRP. Most US expats receiving foreign pensions owe no Paraguayan tax on those amounts.","tax_rate":null,"locally_taxed":false},"social_security":{"notes":"No US-Paraguay tax treaty exists. US Social Security benefits are US-sourced income and are not subject to Paraguayan income tax under the territorial system. US taxation rules on Social Security still apply to US citizens.","locally_taxed":false,"treaty_protection":false},"roth_distributions":{"notes":"Roth IRA distributions are US-sourced and fall outside Paraguayan territorial tax jurisdiction. No Paraguayan tax applies.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"The US and Paraguay have no bilateral tax treaty. Paraguay uses a strict territorial tax system - income sourced outside Paraguay is not subject to Paraguayan tax. Distributions from US 401(k) or IRA accounts are US-sourced income and are not taxable in Paraguay. US citizens remain liable for US taxation on these distributions regardless of residence.","tax_rate":null,"locally_taxed":false,"treaty_protection":false}}

{"rate":0.08,"notes":"Capital gains in Paraguay are generally incorporated into the personal income tax (IRP) base and taxed at the applicable progressive rate. Gains from sale of assets by companies are subject to IRE at 10%.","details":{"tax_type":"Capital Gains Tax","country_name":"Paraguay","country_iso_code":"PRY","source_references":["PwC Worldwide Tax Summaries - Paraguay","Law No. 6380/2019 (Paraguayan Tax Reform)"],"last_verified_date":"2026-06-03","general_description":"Paraguay does not have a standalone capital gains tax. For individuals, gains from asset disposals may be included in the personal income tax (Impuesto a la Renta Personal, IRP) base if the individual is an IRP taxpayer, taxed at progressive rates of 8% or 10%. For companies, capital gains are included in the corporate income tax (Impuesto a la Renta Empresarial, IRE) base at a flat 10% rate. Paraguay operates a territorial tax system, so gains from foreign-sourced assets are generally not taxed locally.","corporate_capital_gains":{"rate":0.1,"tax_treatment":"Included in IRE (corporate income tax) base at 10% flat rate. Territorial system applies - only Paraguayan-source gains are taxable."},"individual_capital_gains":{"rate":0.08,"tax_treatment":"Included in IRP (personal income tax) base at progressive rates of 8% (income up to approximately PYG 120 million) or 10% (above that threshold). Territorial system applies. Many individuals fall below the IRP registration threshold and owe no tax."}}}

{"notes":"Dividends and profit distributions paid by Paraguayan companies to resident or non-resident individuals are subject to a withholding tax under the IDU (Impuesto a los Dividendos y a las Utilidades) at a rate of 8% for resident recipients and 15% for non-resident recipients. Distributions to corporate shareholders may differ. Paraguay's territorial system means foreign-source dividends received by residents are not taxed locally.","rates":[{"rate":0.08,"type":"withholding","notes":"Dividends paid to resident individuals - IDU withholding rate."},{"rate":0.15,"type":"withholding","notes":"Dividends paid to non-resident individuals or entities - IDU withholding rate."}]}