Countries › Paraguay › Guide › 6. Taxes › Personal income tax (IRP) in Paraguay: 8 percent on capital income, 8 to 10 percent on earnings above PYG 80 million
Personal income tax (IRP) in Paraguay: 8 percent on capital income, 8 to 10 percent on earnings above PYG 80 million
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Last verified: 2026-10-28 · Status: Stable
Resident individuals, Paraguayan or foreign, pay the Impuesto a la Renta Personal (IRP) on Paraguayan source income only, in two separate baskets: capital income and gains at a flat 8 percent, and income from employment or independent services at 8, 9 and 10 percent on net income. Service income is taxed only once gross service income exceeds PYG 80,000,000 in a year, and taxpayers then deduct documented personal and family spending, which often brings the effective rate far below the headline. Dividends already taxed by IDU, Paraguayan bank interest, the thirteenth month salary and statutory severance are exempt.
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
| Top IRP rate on personal services income | 10 %Ley 6380/2019 art. 69, as of 2026-10-28 · in force |
|---|---|
| Lowest IRP rate on personal services income | 8 %Ley 6380/2019 art. 69, as of 2026-10-28 · in force |
| Gross service income threshold to pay IRP | 80000000 PYGLey 6380/2019 art. 62 and 69, as of 2026-10-28 · in force |
| Net income above which the 10 percent rate applies | 150000000 PYGLey 6380/2019 art. 69, as of 2026-10-28 · in force |
| IRP rate on individuals' capital income and gains | 8 %Ley 6380/2019 art. 60, as of 2026-10-28 · in force |
| Tax base for residents | Paraguayan source income only Ley 6380/2019 art. 47 and 48, as of 2026-10-28 · in force |
The rule
1. Who and what. IRP is an annual tax on residents' Paraguayan source income in two categories: capital income and gains (excluding dividends taxed by IDU), and income from personal services, employed or independent. Service income paid by Paraguayan IRE or IRP taxpayers for work done abroad is also Paraguayan source. Each category is settled separately and costs or gains cannot be moved between them. Spouses are taxed individually.
Cost to do it: Registration in IRP once a threshold is crossed; the law sets no fee.
Example: A foreign manager resident in Asunción pays IRP on the salary paid by the Paraguayan subsidiary. / Income from a US employer for work outside Paraguay is outside IRP.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 47, 48, 49, 51 and 53, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Registration in IRP once a threshold is crossed; the law sets no fee.
Example: A foreign manager resident in Asunción pays IRP on the salary paid by the Paraguayan subsidiary. / Income from a US employer for work outside Paraguay is outside IRP.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 47, 48, 49, 51 and 53, 2019-09-25 official text · verified 2026-10-28
2. Capital income at 8 percent. Covers dividends not taxed by IDU, interest from Paraguayan payers, income from transparent structures, royalties for rights used in Paraguay, gains on shares in entities owning Paraguayan property, gains on Paraguayan real estate and movable property, rents, prizes, gifts and unexplained wealth increases. On sales of real estate, movables, shares and quotas, net income is presumed to be the lower of 30 percent of the price or the documented gain; on rents, 50 percent of rent or the documented net rent.
Cost to do it: Effective tax on a property sale is at most 2.4 percent of the price.
Example: A flat sold for PYG 1,000,000,000 bought for PYG 800,000,000 with invoices: IRP on PYG 200,000,000, that is PYG 16,000,000. / On a US$170,407 sale the IRP is US$2,727 using the documented gain.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 57, 59 and 60, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Effective tax on a property sale is at most 2.4 percent of the price.
Example: A flat sold for PYG 1,000,000,000 bought for PYG 800,000,000 with invoices: IRP on PYG 200,000,000, that is PYG 16,000,000. / On a US$170,407 sale the IRP is US$2,727 using the documented gain.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 57, 59 and 60, 2019-09-25 official text · verified 2026-10-28
3. Service income: threshold and scale. An individual enters IRP on service income once gross taxed service income since 1 January exceeds PYG 80,000,000. Below that, formal obligations apply but no tax is paid. Net income is taxed at 8 percent up to PYG 50,000,000, 9 percent from PYG 50,000,001 to 150,000,000 and 10 percent above PYG 150,000,000, each rate applying to the slice in its bracket.
Cost to do it: Maximum marginal rate 10 percent.
Example: Net service income of PYG 200,000,000: PYG 4,000,000 + PYG 9,000,000 + PYG 5,000,000 = PYG 18,000,000. / Net service income of US$34,081 pays US$3,067, an average 9 percent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 62 and 69, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Maximum marginal rate 10 percent.
Example: Net service income of PYG 200,000,000: PYG 4,000,000 + PYG 9,000,000 + PYG 5,000,000 = PYG 18,000,000. / Net service income of US$34,081 pays US$3,067, an average 9 percent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 62 and 69, 2019-09-25 official text · verified 2026-10-28
4. Generous deductions. Gross service income excludes the worker's own social security contributions and employer paid health plans. Deductible are expenses linked to the activity and, for the taxpayer and dependants, documented spending in Paraguay on food, clothing, housing rent and upkeep, furniture and appliances and leisure; health and education spending in Paraguay or abroad; one car every three years; one home every five years (instalments or cash) and the employer's social security contribution. Deductions must be funded with taxed income of the year, loans or prior five years' after tax income.
Cost to do it: Every deductible expense needs a valid invoice in the taxpayer's or dependant's name.
Example: Salary PYG 200,000,000, own IPS PYG 18,000,000, documented family spending PYG 100,000,000: net income PYG 82,000,000, IRP PYG 6,880,000. / On a US$34,081 salary the IRP in that case is US$1,172, about 3.4 percent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 63, 64, 65 and 66, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Every deductible expense needs a valid invoice in the taxpayer's or dependant's name.
Example: Salary PYG 200,000,000, own IPS PYG 18,000,000, documented family spending PYG 100,000,000: net income PYG 82,000,000, IRP PYG 6,880,000. / On a US$34,081 salary the IRP in that case is US$1,172, about 3.4 percent.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 63, 64, 65 and 66, 2019-09-25 official text · verified 2026-10-28
5. Exempt income. Interest on government bonds; gains on expropriation; movable property sales up to PYG 20,000,000 a year; FX gains on holding foreign currency; the legal thirteenth month salary; severance up to the legal minimum; non contributory pensions; listed securities returns; Paraguayan bank and cooperative deposit interest; and small prizes.
Cost to do it: Severance above the statutory minimum, for example under a collective agreement, is taxable.
Example: The aguinaldo is fully exempt. / Interest on a guaraní or dollar deposit at a Paraguayan bank is IRP exempt.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 56, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Severance above the statutory minimum, for example under a collective agreement, is taxable.
Example: The aguinaldo is fully exempt. / Interest on a guaraní or dollar deposit at a Paraguayan bank is IRP exempt.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 56, 2019-09-25 official text · verified 2026-10-28
6. Collection. The tax administration can designate withholding and collection agents for IRP, and must set collection on real estate sales and royalties as a final payment; lottery prizes bear final 8 percent withholding on the full prize.
Cost to do it: Withholding is credited against the annual return except where final.
Example: A lottery prize of PYG 10,000,000 bears final IRP of PYG 800,000. / A prize of US$1,704 bears US$136.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 54 and 61, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Withholding is credited against the annual return except where final.
Example: A lottery prize of PYG 10,000,000 bears final IRP of PYG 800,000. / A prize of US$1,704 bears US$136.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 54 and 61, 2019-09-25 official text · verified 2026-10-28
| Net income slice (PYG) | Rate | USD equivalent of slice |
|---|---|---|
| Up to 50,000,000 | 8% | Up to US$8,520 |
| 50,000,001 to 150,000,000 | 9% | US$8,520 to US$25,561 |
| Above 150,000,000 | 10% | Above US$25,561 |
IRP scale on personal services (Ley 6380/2019 art. 69)
Worked example
- A foreign executive resident in Paraguay earns a gross salary of PYG 200,000,000 (US$34,081) in 2026.
- Own IPS contribution at 9 percent, PYG 18,000,000, is excluded from gross income.
- Documented spending on rent, food, school fees and health for the family: PYG 100,000,000 (US$17,041).
- Net taxable income PYG 82,000,000: 8 percent on PYG 50,000,000 = PYG 4,000,000 plus 9 percent on PYG 32,000,000 = PYG 2,880,000; IRP PYG 6,880,000 (US$1,172).
Step by step
- Track gross service income from 1 January; once above PYG 80,000,000, register for IRP with the DNIT.
- Collect invoices with your identity number or RUC for every personal and family expense you intend to deduct.
- Register dependants annually in the DNIT system.
- File the annual IRP return on the DNIT calendar and pay the balance after withholdings.
- For property sales, keep the registered deed and purchase invoices to use the actual gain instead of 30 percent of price.
Common traps
- Foreign source income of residents is outside IRP, but income for services abroad paid by a Paraguayan taxpayer is inside (art. 48).
- Deductions must be paid with taxed income, loans or the previous five years' after tax income; spending funded by exempt income does not count (art. 64).
- Luxury assets (aircraft, yachts, jewellery, art) are deductible only when sold, under the capital rules (art. 67).
- The PYG amounts in art. 62 and 69 can be updated by the Executive for inflation once cumulative CPI since the last update exceeds 10 percent, published by the end of January (art. 139); check the DNIT before relying on the statutory figures.
- Ley 6380 has no day count test for individual residence; residence follows the general rules and immigration status.
Sources
- DNIT, Ley Nº 6380/2019 text
- BACN, Ley Nº 6380/2019 (promulgation 25 September 2019)
- Banco Central del Paraguay, reference exchange rates (28 October 2026)
Related pages
- taxes/payroll-taxes-and-social-security
- taxes/tax-system-overview
- immigration/residence-and-investor-pass
- labor/employing-people
- real-estate/buying-property-and-foreign-ownership
- /country/paraguay/
- /calendar/
- Live dashboard
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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