IRP — Paraguay Personal Income Tax: how it works and who must file

The IRP (Personal Income Tax) is Paraguay's tax on individual income. Regulated by Law 6380/2019, it exclusively taxes income from Paraguayan sources.

Rates and minimum threshold

• 8% on annual net income up to G. 50,000,000
• 9% on the portion between G. 50,000,001 and G. 150,000,000 annually
• 10% on amounts exceeding G. 150,000,000 annually

A non-taxable minimum is defined by the DNIT based on the legal minimum wage (approximately G. 80 million/year, ~USD 11,000). If your Paraguayan income is below this threshold, you are not required to file IRP.

What income is NOT included?

• Dividends from LLCs or other foreign-incorporated companies
• Capital gains and investments made outside Paraguay
• Rental income from real estate located abroad

Thanks to the territorial principle, Paraguay only taxes income from Paraguayan sources. Important: freelance or professional services physically performed from Paraguay (even if billed abroad) may be classified as Paraguayan-source income under the law and DNIT's criteria. The qualification depends on the specific case.

Need advice on your specific tax situation? Contact a certified accountant in Paraguay.