Paraguay tax system: complete guide to IRP, IRE, VAT and IMAGRO

Paraguay's tax system is relatively simple compared to other countries in the region. Law 6380/2019 (in force since January 2020) completely modernized the fiscal structure, replacing IRACIS with IRE.

Main taxes

IRP — Personal Income Tax

For individuals. Progressive: 8%, 9%, max 10%. Minimum threshold: G. 80 million/year. Only Paraguayan-source income.

IRE — Corporate Income Tax

For legal entities. Flat rate of 10% on net income. Replaced IRACIS as of 01/01/2020.

VAT — Value Added Tax

General rate: 10%. Reduced rate: 5% for basic food items, medicines and medical services.

What does NOT exist in Paraguay

• Inheritance or estate tax
• Wealth tax
• Foreign exchange controls
• Tax on foreign-source income (territorial principle)