Paraguay taxes — by nationality. Your home country's rules don't disappear when you land here.

The Paraguay side in 90 seconds

Territorial system, narrow definition of local-source.

Paraguay taxes only Paraguay-source income for both residents and citizens. Detailed rules live on /tax-residency/; the summary below is what most readers need before reading the by-nationality sections.

• Foreign-source income (foreign salary, foreign dividends, foreign capital gains, foreign pension): 0% IRP. No filing required for foreign-source unless you also have local-source.
• Paraguay-source income (Paraguay rental, Paraguay business, salary for work performed in Paraguay): 8–10% IRP, progressive bracket starting at ~Gs. 150 million (~US$ 25k) annually.
• No CFC. No worldwide-income reporting. No wealth tax. No exit tax for tax residents leaving Paraguay.
• Tax residency triggers at ~120 days in-country in a calendar year, OR by registering for a RUC (tax ID), OR by declaring tax residency on a Paraguayan tax return.
• Tax residency is separate from immigration residency. You can hold a cédula and not be tax-resident; you can be tax-resident without a cédula (rare, usually unintended).

By nationality

What stays the same when you move from your home country.

• United States

  Citizenship-based taxation. The IRS still wants the 1040 forever.

  What stays the same

  • 1040 + worldwide income reporting: no change. The IRS taxes US citizens and green-card holders on global income, regardless of residence.
  • FATCA: Paraguay's IGA status with US Treasury is informal (not on the published Model 1 in-force list) — but Paraguayan banks ask for W-9 / W-8BEN at onboarding and apply FATCA-style due diligence anyway. Treat as 'banks know you're a US person and document accordingly.' Verify your specific bank's reporting posture before relying on a particular rail.
  • FBAR: foreign accounts > US$ 10,000 aggregate require FinCEN Form 114 annually. Includes Paraguayan bank accounts, Wise, Revolut, brokerage.
  • State tax: a few states (CA, NM, SC, VA) keep claiming residency on weak ties. File a clean Form 590 / equivalent and document the move.
  • Renouncing citizenship is the only true exit. State Department dropped the fee from US$ 2,350 to US$ 450 effective April 13, 2026. Form 8854 exit-tax filing required. Triggers mark-to-market on net worth ≥ US$ 2.0M (or 5-yr avg tax ≥ ~US$ 206k/yr — 2025 IRS figure). Mark-to-market gain over US$ 890k exemption (2025 figure) is taxed at long-term capital gains rates.

  What changes

  • Foreign Earned Income Exclusion (FEIE): US$ 130,000 for 2025; US$ 132,900 for 2026. Eliminates US tax on most expat earned income IF you meet the bona-fide-residence or 330-days-out-of-365 test. Paraguay residence + 330 days outside the US works cleanly.
  • Foreign Tax Credit: applies to foreign income tax paid. Paraguay's 0% on foreign income means there's no Paraguayan tax to credit, so FTC isn't useful for foreign-source. Useful for Paraguay-local-source IRP if you have it.
  • Self-employed: SE tax (15.3%) does NOT go away under FEIE. Plan for it — and consider a Paraguayan SA/SRL to convert SE income into corporate income (consult both lawyers first).

• Canada

  Departure tax + deemed disposition on most assets.

  What stays the same

  • Canada Revenue Agency departure tax at exit: deemed disposition on non-Canadian-real-estate assets at fair market value. Capital gains computed on the deemed sale, taxed at exit. Election to defer with a security deposit is possible.
  • Section 116 certificate for any Canadian real estate sold after departure.
  • RRSP/RRIF: continues to grow tax-deferred, but withdrawals while non-resident attract 25% withholding (or treaty rate). Paraguay has no Canadian DTT, so the full 25%.
  • TFSA: Paraguayan side treats it as a normal foreign account. Canadian rules don't allow contributions while non-resident.
  • OAS/CPP: payable abroad, withholding rates apply.

  What changes

  • Cleanly non-resident + Paraguay resident: foreign income outside Canada = 0% Paraguay.
  • Canadian-source income (rent, dividends, employment income) keeps Canadian withholding.

• United Kingdom

  Statutory Residence Test + the post-2025 remittance-basis reform.

  What stays the same

  • Statutory Residence Test (SRT): your UK tax residence depends on day-count + ties, not your declared residence elsewhere. Plan to clearly fail the SRT before claiming Paraguay tax residency — typically <16 days in-UK if you were resident the prior year, less than 91 days if you were non-resident.
  • Inheritance tax (IHT): UK domicile (or, post-2025, deemed long-term residence) attaches IHT to worldwide estate at 40%. Domicile is sticky — the 'Get rid of UK ties' bar is high. Remoteness (Paraguay) helps; explicit statements + a real life elsewhere matter.
  • Form P85 on departure. NRL (Non-Resident Landlord) scheme if you keep UK rental property.
  • From April 2025, the remittance-basis non-dom regime is replaced. New 4-year FIG (Foreign Income & Gains) regime allows a brief tax holiday for newly-resident-in-UK individuals only — irrelevant if you're leaving.

  What changes

  • Cleanly broken UK tax residence + Paraguay tax residence = Paraguay treats your foreign income at 0%. No UK tax on non-UK income once non-resident.
  • UK source income (rentals, dividends from UK companies) remains UK-taxable. Use a Paraguayan tax credit only if treaty applies — UK-Paraguay has no comprehensive double-tax treaty (status as of 2026).
  • ISA, SIPP: Paraguay does not recognise these as tax-deferred. Distributions from a SIPP into a Paraguayan account would be Paraguayan-foreign-source (0% Paraguay) but UK-source from the UK side; UK PAYE may withhold.

• Germany

  Wegzugsbesteuerung (§ 6 AStG) on substantial corporate holdings.

  What stays the same

  • Exit tax (§ 6 AStG): if you've held ≥ 1% of a German Kapitalgesellschaft for ≥ 7 of the last 12 years, deemed disposal at exit. Tax due on the gain at exit, even though you haven't sold. EU-wide deferrals exist; Paraguay is third-country, no automatic deferral.
  • CFC (Außensteuergesetz): if you control a foreign passive company while German tax resident, its undistributed income is attributed to you. Mostly relevant if you keep a German residence after moving — don't.
  • Erweiterte beschränkte Steuerpflicht (extended limited tax liability): for 10 years after leaving, German citizens moving to a 'low-tax country' (Paraguay qualifies) remain liable on German-source income on a broader-than-usual definition. File correctly.
  • Anmeldung at Bürgeramt: cancel (Abmeldung) on departure. Failing to do this keeps you administratively German-resident.

  What changes

  • Once cleanly out and Paraguay-resident, foreign salary, foreign dividends, foreign rental income are 0% Paraguay-side.
  • German social security: contributions stop on departure. Existing pension entitlements remain — payable into a Paraguayan account.
  • If you incorporate in Paraguay (SA, SRL): CFC rules at home vanish once you're properly out. The Paraguayan corporate IRE is 10% on local-source profit only.

• France

  Sortie de territoire + the 5-year IFI reach.

  What stays the same

  • Exit tax (Article 167 bis CGI): on substantial holdings (>50% of a single company OR portfolio > €800k) at the date of departure. Deferred to disposal if EU/EEA destination; Paraguay is non-EU so the deferral requires a guarantee.
  • IFI (Impôt sur la Fortune Immobilière): for 5 years after departure, French real estate held by ex-French-resident remains in the IFI base. ≥ €1.3M French RE, you owe IFI for 5 more years.
  • Form 2042-NR (non-resident return) for French-source income.
  • Social security (URSSAF / Sécurité Sociale): cease French contributions; you can continue voluntary CFE coverage if you want.

  What changes

  • Foreign salary, dividends, capital gains: 0% Paraguay once cleanly tax-resident in Paraguay (≥ 120 days, RUC active).
  • French-source income: still French-taxable. France-Paraguay has no full DTT, so withholding applies at French statutory rates.

• Italy

  AIRE + the impatriati / pensionati alternatives that may beat moving.

  What stays the same

  • AIRE registration is mandatory for tax-residence purposes. Without it, the Agenzia delle Entrate continues treating you as Italian-resident.
  • Italian-source income (rentals, IT-paying salary, IT pension before 2026 expat regime) remains taxable.
  • Inheritance + gift tax: Italian estate covers worldwide assets if decedent was Italian-resident at death.

  What changes

  • Cleanly out + AIRE registered = Paraguay 0% on foreign source income.
  • Worth considering before a Paraguay move: Italy's regime impatriati (50% reduction on Italian-source for 5 years) and the regime per pensionati esteri (7% flat on foreign pension if you move to a small Southern Italian commune). For some retirees these beat Paraguay even on math; for digital nomads they don't apply.

• China (PRC)

  The 2019 IIT reform + 6-year clock.

  What stays the same

  • Tax residence: domiciled-in-China residents (typically PRC citizens) are taxed on worldwide income unless they qualify under the 6-year exemption rule (broken by 30+ consecutive days abroad in any of the prior 6 years).
  • Foreign-bank reporting under the CRS — Paraguay is NOT a CRS signatory currently, which is one of the reasons HNW Chinese clients consider it. This is a moving target — check current status before relying on it.
  • Capital controls: USD 50,000/year out-of-country limit on RMB conversion. Larger amounts require approved channels (real estate, education, medical) and trigger STR review at the Chinese banking regulator.

  What changes

  • Cleanly out (and crucially: 30+ consecutive days abroad before triggering the 6-year clock test) = Paraguay 0% on foreign source.
  • Practical: most PRC-passport holders moving to Paraguay run substantial banking via Hong Kong or Singapore as the FX bridge, with the Paraguayan account as the destination.

• Russia

  CFC + 13/15% PIT — ceasing residence requires ≤ 183 days/yr.

  What stays the same

  • Russian tax residence is determined by day-count: ≥ 183 days in any 12-month period = resident, taxed on worldwide income. Move out (≤ 183 days) to break.
  • CFC (КИК) rules apply to Russian tax residents holding > 25% of foreign companies (or > 10% if Russian residents jointly hold > 50%). Disclosure form required annually until you cease residency.
  • Currency control: Russian residents must report foreign accounts (Form 1110704) annually, including a Paraguayan account. Sanctions exposure for repatriation requirements depending on the account's currency and the local bank's correspondent relationships.
  • Sanctions context: Russian-passport holders have heavier KYC at Paraguayan banks since 2022. Source-of-funds review takes longer; plan for 4–8 weeks for a clean account opening.

  What changes

  • Once non-resident (≤ 183 days), foreign income at 0% Paraguay.
  • Russian-source income (dividends from Russian companies, Russian rental): 30% non-resident PIT — higher than the resident 13/15%. Often a disincentive to keep substantial Russian-source income after moving.

• Brazil

  Saída Definitiva + 12-month attribution.

  What stays the same

  • Brazilian Comunicação de Saída Definitiva (DSDP) at departure + Declaração de Saída Definitiva (DSD) the following year. Failure to file = treated as Brazilian tax resident on worldwide income, indefinitely.
  • Continued Brazilian tax residence for 12 months from departure UNLESS you file the DSDP. After that, only Brazil-source income is taxed.
  • Brazil-source income (rentals, BR companies): subject to non-resident rates, often higher than resident.
  • MERCOSUR temporary residence: simplifies the Paraguayan side — Brazilians qualify for the cheaper Mercosur radicación (Gs. 2,230,040 ≈ US$ 369) vs the Ley 6984 standard.

  What changes

  • Once DSD filed + Paraguay resident, foreign source = 0%. Paraguay does not have a DTT with Brazil, so cross-border taxes are at statutory non-resident rates.
  • Brazilian retirement (INSS, RPC): payable abroad. Bank-to-bank wire to a Paraguayan USD account works.

• Argentina

  No exit tax — but capital controls dominate.

  What stays the same

  • Argentine residency for tax purposes is determined by intent + day-count. Establish Paraguayan residency cleanly + spend most of the year out of Argentina.
  • Bienes Personales (wealth tax): worldwide assets covered for Argentine tax residents. Once you're Paraguay-resident, only Argentine-source assets remain in the base.
  • Capital controls: USD purchases capped at ~US$ 200/month for retail residents. Cepo cambiario complicates getting USD into Paraguay; many Argentinians arrive with crypto on a hardware wallet and convert at a Paraguayan OTC.
  • MERCOSUR cheaper residency option (Gs. 2,230,040 cash ≈ US$ 369 vs Ley 6984's Gs. 2,787,550 / US$ 460).

  What changes

  • Foreign-source (anything outside Argentina) becomes 0% Paraguay-side once tax-resident here.
  • The day-to-day USD friction goes away — Paraguayan banks accept USD freely, no cepo, no restriction.

The banking rails

Wise + Paraguayan USD account is the standard setup.

Most relocators end up running a 2-rail or 3-rail banking setup. The combinations below are what works in practice for foreigners with Paraguay residency. None of these are sponsored — your situation may genuinely call for something different.

• Paraguayan USD account (Itaú / Sudameris / Continental)

  USD savings, rental income, large wires in/out

  Required for receiving meaningful sums into Paraguay. Itaú is the default for foreigners; the others work too. Source-of-funds review on first deposit > US$ 5,000. KYC is more rigorous than peer countries — bank on 4–8 weeks for full account activation.

• Paraguayan PYG account

  Daily life — cards, utility bills, rent paid in PYG

  Same banks as the USD account. Useful for the routing the local economy uses (electricity, water, internet, mobile, taxi). Currency conversion at the Paraguayan rate is competitive.

• Wise (Borderless)

  Receiving foreign salary, multi-currency holding, low-cost FX

  The most-used international rail. Holds 50+ currencies; pays you on local rails (US ACH, EU SEPA, UK Faster Payments). Convert internally at near-mid-market FX. Card works in Paraguay and abroad; ATM withdrawals: 2 free per month up to US$ 100. Wire from Wise to your Paraguay USD account = 0.4–0.6% all-in.

• Revolut (where available)

  Day-to-day debit + crypto on/off-ramp + multi-currency

  Available for EU, UK, US (selectively) residents. Less reliable for international wires than Wise but better for daily cards + travel. Subject to Revolut's KYC posture on Paraguayan addresses (sometimes friction).

• Statrys / Mercury / Relay (business accounts)

  Foreign company business banking — useful for non-PY entities

  If you operate a Delaware LLC, BVI Ltd, Hong Kong Ltd, etc., and need a real business account that accepts wires from international clients, these are the realistic non-bank choices. None offer a Paraguayan account — they live in the company's domicile country. Pair with Wise to settle into Paraguay.

• Payoneer

  Receiving from US-only payors that won't pay Wise

  Some US payors (Amazon Affiliates, certain marketplaces) only push to Payoneer. Treat as a transit account; sweep to Wise weekly. Higher fees than Wise — never hold balance on Payoneer.

• Crypto exchanges (Binance, Kraken, Coinbase)

  On/off ramping where banks fail or for crypto-heavy holders

  P2P USDT-PYG via Binance is the practical rail when bank wires are slow. Self-custody recommended for size. See /crypto/ for source-of-funds documentation that keeps Paraguayan banks comfortable.

Common working combos: (1) US/UK/EU resident → Wise + Itaú USD/PYG. (2) Crypto-heavy holder → Coinbase/Kraken + Wise + Itaú USD/PYG. (3) International business owner → Mercury/Statrys + Wise + Itaú USD/PYG. (4) LATAM resident with capital controls → P2P USDT in + Itaú USD/PYG.

Common mistakes

Where dual-jurisdiction setups go wrong.

• Claiming Paraguay tax residency without breaking home residency

  Result: dual tax residency without a treaty to break the tie. Your home country and Paraguay both tax the same income; Paraguay's 0% on foreign-source doesn't help because your home country taxes the same income at its statutory rate. The fix is to break home residency cleanly — most jurisdictions have a specific test (UK SRT, Canadian non-resident, Italian AIRE, Brazilian DSD) that must be satisfied with a paper trail.

• Forgetting the exit-tax filing

  German § 6 AStG, French Article 167 bis, Canadian deemed disposition, US 8854. Each requires a return filed at exit on substantial holdings. The deemed-sale tax is owed even if you never sold. Failing to file = the home country audit reaches you years later, with penalties + interest.

• Routing through a non-treaty bridge

  Using a tax-haven jurisdiction (Cyprus, BVI, Cayman) to bridge between Paraguay and your home country sometimes worsens the situation — your home country's CFC may attribute the bridge entity's income to you, AND tax-haven 'bridges' attract additional scrutiny under post-2024 OECD Pillar 2 / GloBE rules. Direct paths are usually cleaner.

• Not declaring Paraguay-source income locally

  If you rent out a Paraguayan property, run a Paraguayan business, or earn salary for work physically performed in Paraguay, that's Paraguay-source. The 0% applies only to foreign-source. Local-source IRP filings are mandatory for RUC holders. Auditors do follow the bank trail.

• Keeping the empty apartment back home

  Many tax authorities use 'available housing' as a strong tie indicator. UK SRT, German residence test, French Article 4B all weight an empty available home heavily. Sell, rent on a long-term lease (1-yr+), or have a relative actually live there. An apartment that 'sits ready for your return' often defeats the residency claim.

• Funding via crypto without source-of-funds documentation

  Paraguayan banks accept crypto-derived funds but ask for documentation. Save the foreign exchange's KYC letter, monthly statements, withdrawal confirmations, on-chain receipts. The first time a bank questions a deposit without paper, the account freezes for 4–8 weeks. With paper, it resolves in 24 hours.