Countries › Paraguay › Guide › 6. Taxes › Withholding on payments abroad (INR) in Paraguay: interest, royalties, services, share sales and digital services

Withholding on payments abroad (INR) in Paraguay: interest, royalties, services, share sales and digital services

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Last verified: 2026-10-28 · Status: Stable

Payments from Paraguay to non residents are taxed by the Impuesto a la Renta de No Residentes (INR) at 15 percent, applied to a deemed net income that the law fixes by type of payment. The result is an effective 4.5 percent on interest to unrelated foreign banks, on freight and on digital services, 10.5 percent on personal services and a full 15 percent on anything paid to shareholders, head offices or related companies, and on any other remittance. The Paraguayan payer withholds, is jointly liable and loses part of the deduction if it does not; on share sales between two non residents the Paraguayan company whose shares are sold is liable.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (planilla de cotizaciones of that day). Conversions are for orientation only.

Key facts

Effective INR on interest to unrelated foreign lenders (15 percent on 30 percent deemed net)	4.5 %Ley 6380/2019 art. 75 and 76, as of 2026-10-28 · in force
Effective INR on interest to related foreign parties (15 percent on 100 percent)	15 %Ley 6380/2019 art. 75 and 76, as of 2026-10-28 · in force
Effective INR on royalties to related foreign parties	15 %Ley 6380/2019 art. 75 and 76, as of 2026-10-28 · in force
Effective INR on personal services fees to non residents (15 percent on 70 percent)	10.5 %Ley 6380/2019 art. 75 num. 4, as of 2026-10-28 · in force
Effective INR on rents of Paraguayan real estate to non residents (15 percent on 50 percent)	7.5 %Ley 6380/2019 art. 75 num. 3, as of 2026-10-28 · in force
Maximum effective INR on a non resident's sale of Paraguayan shares, share of price	4.5 %Ley 6380/2019 art. 75 num. 5, as of 2026-10-28 · in force
Statutory INR rate	15 %Ley 6380/2019 art. 76, as of 2026-10-28 · in force

The rule

1. Scope. INR taxes Paraguayan source income of individuals, companies and entities that are not resident and have no permanent domicile in Paraguay, whether or not they act through a local agent. The source list includes interest paid by branches to head office, interest on foreign loans, securities income, gains on Paraguayan property and shares, insurance, leasing of assets used in Paraguay, derivatives, international transport, services from abroad linked to IRE taxed activity, services physically rendered in Paraguay, digital services used in Paraguay and any other amount remitted abroad except payments for imported goods.
Cost to do it: Applies regardless of where the contract is signed or paid.
Example: Fees to a São Paulo consultancy for advice used by a Paraguayan IRE taxpayer are within INR. / Payments for imported goods are outside INR.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 71, 72 and 73, 2019-09-25 official text · verified 2026-10-28

2. Deemed net income and effective rates. The 15 percent rate applies to: 30 percent of gross interest and commissions on loans from unrelated foreign banks, financial institutions and multilaterals (including bonds placed abroad), international transport and freight, container leasing, live performing arts, international insurance, telecom and digital services from abroad and sales of movable goods located in Paraguay; 30 percent of the price of Paraguayan real estate; 50 percent of rents on Paraguayan real estate; 70 percent of fees for personal services; for share or quota sales the lower of price less nominal value or 30 percent of price; and 100 percent of amounts paid to shareholders, head office or related entities and of any other amount.
Cost to do it: Effective rates: 4.5, 7.5, 10.5 or 15 percent of the gross payment.
Example: Interest of PYG 586,831,000 to an unrelated US bank: INR PYG 26,407,395. / Interest of US$100,000 to an unrelated US bank: INR US$4,500; the same interest to the US parent: US$15,000.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 75 and 76, 2019-09-25 official text · verified 2026-10-28

3. When and who withholds. The obligation arises when funds are made available, remitted or paid, whichever is first, and offset, novation or settlement count as payment. Every IRE taxpayer, the State and municipalities must withhold and are jointly liable; individual service providers withhold only on similar services linked to their IRP income. The INR cannot be deducted from its own base and the payment is final. For international freight it is paid before goods leave the customs area.
Cost to do it: If the contract is net of tax, the payer bears the INR on top; there is no statutory gross up formula.
Example: Offsetting a PYG 500,000,000 intercompany payable against a receivable triggers INR as if paid. / Offsetting a US$85,203 intercompany payable triggers INR of US$12,781 at the related party rate.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 74 and 77, 2019-09-25 official text · verified 2026-10-28

4. Share sales between non residents. When non residents sell shares or quotas of a Paraguayan company to each other, the Paraguayan issuer is liable for the seller's INR, and the obligation arises on the date of the transaction or contract. The base is the lower of the price minus nominal value or 30 percent of the price, so the INR never exceeds 4.5 percent of the price.
Cost to do it: Build an INR escrow or holdback into offshore share purchase agreements; the target pays otherwise.
Example: Shares with nominal value PYG 1,000,000,000 sold for PYG 10,000,000,000: base is the lower of PYG 9,000,000,000 and PYG 3,000,000,000, INR PYG 450,000,000. / On a US$1,704,068 price the INR is US$76,683, payable by the Paraguayan company.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 73 num. 4, 75 num. 5 and 77, 2019-09-25 official text · verified 2026-10-28

5. Deduction link. The payer's IRE deduction for interest, royalties and technical assistance paid to related parties is capped at 30 percent of net income, and payments abroad without INR withholding are capped at 1 percent of gross income; with withholding they are fully deductible subject to market value.
Cost to do it: Failing to withhold costs both the INR exposure and lost IRE deductions.
Example: Royalties of PYG 300,000,000 paid without INR by a company with gross income of PYG 5,000,000,000: deduction limited to PYG 50,000,000. / Royalties of US$51,122 paid without INR: deduction limited to US$8,520.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 15 num. 18 and 23, 2019-09-25 official text · verified 2026-10-28

6. Exemptions. INR does not apply to interest and gains on government and municipal bonds, to diplomats on reciprocity, to export freight by foreign carriers, to returns on securities traded on regulated stock exchanges and to returns on Ley 5452 investment funds. Approved Ley 7548/2025 projects of at least US$13,000,000 can obtain an INR exemption on interest paid to foreign banks for project financing, for the term of the loan.
Cost to do it: The Ley 7548 exemption requires approval by biministerial resolution.
Example: A foreign bank loan for an approved project paying PYG 600,000,000 of interest saves PYG 27,000,000 of INR a year. / Interest of US$102,244 on an approved project loan saves US$4,601 of INR a year.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional; Ley Nº 7548/2025, Ley 6380 art. 79; Ley 7548 art. 4 d), 2019-09-25 official text · verified 2026-10-28

7. Treaties can cap the rate. Paraguay's comprehensive income tax treaties (Chile, Taiwan, United Arab Emirates, Uruguay, Qatar and Spain) cap source taxation of interest, royalties and, in some cases, technical fees; the Spain treaty caps interest and royalties at 5 percent. There is no income tax treaty with Argentina, so payments to Argentine residents bear the domestic INR.
Cost to do it: Document the recipient's tax residence and beneficial ownership before applying a cap.
Example: Royalties of PYG 586,831,000 to a related Spanish licensor: domestic INR 15 percent, treaty cap 5 percent. / Royalties of US$100,000 to a related Spanish licensor: INR falls from US$15,000 to US$5,000.Ley Nº 7271/2024 (Spain treaty) and DNIT list of international agreements, Spain treaty art. 11 and 12, 2024-10-14 official text · verified 2026-10-28

Payment to a non resident	Deemed net	Effective rate	On US$100,000
Interest to unrelated foreign bank or multilateral	30%	4.5%	US$4,500
International freight, transport, containers	30%	4.5%	US$4,500
Digital and telecom services from abroad	30%	4.5%	US$4,500
Sale of Paraguayan real estate	30% of price	4.5%	US$4,500
Rent of Paraguayan real estate	50%	7.5%	US$7,500
Personal services, professional or not	70%	10.5%	US$10,500
Sale of shares or quotas	Lower of gain over nominal or 30% of price	Up to 4.5% of price	Up to US$4,500
Interest, royalties, fees to shareholders, head office or related parties	100%	15%	US$15,000
Any other remittance (for example royalties to unrelated licensors)	100%	15%	US$15,000

INR effective rates (Ley 6380/2019 art. 75 and 76, statutory rate 15 percent)

Worked example

A Paraguayan EAS pays its US parent US$100,000 (PYG 586,831,000) of intercompany interest and an unrelated Chicago bank US$100,000 of loan interest.
Parent: deemed net 100 percent, INR US$15,000 (PYG 88,024,650); deductible for IRE only within the 30 percent of net income cap and the BCP average passive rate.
Bank: deemed net 30 percent, INR US$4,500 (PYG 26,407,395).
Both amounts are withheld at payment (or offset), filed on the DNIT calendar and are final taxes for the recipients.

Step by step

Classify each outbound payment: related or unrelated, and which art. 75 category applies.
Agree in the contract whether fees are gross or net of INR; if net, budget the extra cost.
Withhold when the amount is made available, remitted, paid or offset, whichever is first.
File and pay the withholding through the DNIT systems and issue the withholding receipt to the provider.
If a treaty applies, keep a residence certificate and beneficial ownership evidence.
On an offshore sale of Paraguayan shares, the Paraguayan company should secure the INR from the parties before the closing date.

Common traps

Royalties and service fees to unrelated licensors fall in the residual 100 percent category unless a specific deemed percentage applies, so the full 15 percent is due (art. 75 num. 7).
Intercompany offsets and novations count as payment and trigger INR (art. 74).
The Paraguayan company is liable for INR on its foreign shareholders' sales of its shares (art. 77).
Paying abroad without withholding caps the IRE deduction at 1 percent of gross income (art. 15 num. 18).

Sources

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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