Countries › Paraguay › Guide › 6. Taxes › Paraguay's tax treaties: six comprehensive treaties, withholding caps and no treaty with Argentina
Paraguay's tax treaties: six comprehensive treaties, withholding caps and no treaty with Argentina
Argentina. For full detail on Argentina, go to The Argentine Thread.
Last verified: 2026-10-28 · Status: Stable
Paraguay has comprehensive income tax treaties with Chile, Taiwan, the United Arab Emirates, Uruguay, Qatar and Spain, plus transport only agreements, and none with the United States, Brazil or Argentina. Because domestic withholding on payments abroad is already low (15 percent on deemed bases), most treaty caps of 15 percent change little; the Spain treaty is the exception, with 5 percent on dividends to a 50 percent parent, 5 percent on interest and 5 percent on royalties, and Chile caps dividends at 10 percent. Without a treaty, residents get unilateral relief: foreign income taxed abroad at 10 percent or more is excluded from IRE.
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
| Comprehensive income tax treaties approved by law | 6 treatiesDNIT list; Leyes 2965, 3972, 6230, 6276, 6387, 7271, as of 2026-10-28 · in force |
|---|---|
| Income tax treaty with Argentina | None in the DNIT list DNIT list of international agreements, as of 2026-10-28 · in force |
| Income tax treaty with the United States | None in the DNIT list DNIT list of international agreements, as of 2026-10-28 · in force |
| Spain treaty cap on dividends to a 50 percent corporate parent | 5 %Ley 7271/2024 art. 10, as of 2026-10-28 · in force |
| Spain treaty cap on interest | 5 %Ley 7271/2024 art. 11, as of 2026-10-28 · in force |
| Spain treaty cap on royalties | 5 %Ley 7271/2024 art. 12, as of 2026-10-28 · in force |
| Chile treaty cap on dividends | 10 %Ley 2965/2006 art. 10, as of 2026-10-28 · in force |
The rule
1. The network. The DNIT lists comprehensive treaties approved by Ley 2965/2006 (Chile), Ley 3972/2010 (Taiwan), Ley 6230/2018 (United Arab Emirates), Ley 6276/2019 (Uruguay), Ley 6387/2019 (Qatar) and, separately, Ley 7271/2024 (Spain, in force 14 October 2024 per the DNIT), plus transport agreements such as Ley 1105/1997 on international air, river and land transport. There is no income tax treaty with Argentina in the DNIT list.
Cost to do it: No fee to claim treaty benefits; documentation of residence is the practical cost.
Example: A Uruguayan parent can rely on the Uruguay treaty; an Argentine parent cannot rely on any treaty. / A US parent has no treaty and bears full domestic rates.DNIT list of international agreements; Ley Nº 7271/2024, Treaty approval laws, 2024-10-14 official text · verified 2026-10-28
Cost to do it: No fee to claim treaty benefits; documentation of residence is the practical cost.
Example: A Uruguayan parent can rely on the Uruguay treaty; an Argentine parent cannot rely on any treaty. / A US parent has no treaty and bears full domestic rates.DNIT list of international agreements; Ley Nº 7271/2024, Treaty approval laws, 2024-10-14 official text · verified 2026-10-28
2. Spain treaty rates. Dividends: 5 percent if the beneficial owner is a company holding directly at least 50 percent of the capital for a 365 day period including the payment date, 0 percent for a pension fund, 10 percent otherwise. Interest: 5 percent. Royalties: 5 percent. Branch profit remittances can be taxed by the source state within the treaty limit. Art. 26 adds a principal purpose test and a beneficial ownership requirement, and the mutual agreement article provides for arbitration of unresolved cases.
Cost to do it: Spanish parents need a Spanish residence certificate and evidence of the 365 day holding.
Example: Dividend of PYG 1,000,000,000 to a 100 percent Spanish parent: IDU capped at PYG 50,000,000 instead of PYG 150,000,000. / On US$170,407 of dividends the saving is US$17,041.Ley Nº 7271/2024 Convenio Paraguay España para evitar la doble imposición, Art. 10, 11 and 12, 2024-10-14 official text · verified 2026-10-28
Cost to do it: Spanish parents need a Spanish residence certificate and evidence of the 365 day holding.
Example: Dividend of PYG 1,000,000,000 to a 100 percent Spanish parent: IDU capped at PYG 50,000,000 instead of PYG 150,000,000. / On US$170,407 of dividends the saving is US$17,041.Ley Nº 7271/2024 Convenio Paraguay España para evitar la doble imposición, Art. 10, 11 and 12, 2024-10-14 official text · verified 2026-10-28
3. Chile treaty rates. Dividends 10 percent; interest 10 percent on loans by banks and insurers, 15 percent otherwise; royalties 15 percent.
Cost to do it: Residence certificate from Chile's SII.
Example: Dividend of PYG 500,000,000 to a Chilean parent: IDU capped at PYG 50,000,000 instead of PYG 75,000,000. / On US$85,203 the saving is US$4,260.Ley Nº 2965/2006 Convenio Paraguay Chile para evitar la doble imposición, Art. 10, 11 and 12, 2006-08-03 official text · verified 2026-10-28
Cost to do it: Residence certificate from Chile's SII.
Example: Dividend of PYG 500,000,000 to a Chilean parent: IDU capped at PYG 50,000,000 instead of PYG 75,000,000. / On US$85,203 the saving is US$4,260.Ley Nº 2965/2006 Convenio Paraguay Chile para evitar la doble imposición, Art. 10, 11 and 12, 2006-08-03 official text · verified 2026-10-28
4. Uruguay treaty rates. Dividends, interest and royalties are each capped at 15 percent, and the treaty adds an article on technical service fees capped at 15 percent. Gains on shares can be taxed at source if, in the prior 365 days, more than 50 percent of their value came from local real estate, or if the seller held at least 50 percent of the capital; it includes a limitation on benefits clause.
Cost to do it: No saving versus the 15 percent IDU; useful mainly for certainty and gains.
Example: Technical fees of PYG 200,000,000 to a related Uruguayan company: domestic INR PYG 30,000,000, treaty cap equal. / On US$34,081 of fees the INR stays US$5,112.Ley Nº 6276/2019 Convenio Paraguay Uruguay para evitar la doble imposición, Art. 10, 11, 12, 13 and 13 bis, 2019-02-13 official text · verified 2026-10-28
Cost to do it: No saving versus the 15 percent IDU; useful mainly for certainty and gains.
Example: Technical fees of PYG 200,000,000 to a related Uruguayan company: domestic INR PYG 30,000,000, treaty cap equal. / On US$34,081 of fees the INR stays US$5,112.Ley Nº 6276/2019 Convenio Paraguay Uruguay para evitar la doble imposición, Art. 10, 11, 12, 13 and 13 bis, 2019-02-13 official text · verified 2026-10-28
5. UAE and Qatar treaty rates. Dividends capped at 15 percent; interest 6 percent on bank and insurance company loans and 15 percent otherwise; royalties 15 percent.
Cost to do it: The domestic INR on unrelated bank interest (4.5 percent effective) is already below the 6 percent cap.
Example: Interest of PYG 100,000,000 to a related UAE company: domestic INR PYG 15,000,000 equals the cap. / Interest of US$17,041: INR US$2,556.Ley Nº 6230/2018 (United Arab Emirates) and Ley Nº 6387/2019 (Qatar), UAE art. 11, 12 and 13; Qatar art. 10, 11 and 12, 2019-09-27 official text · verified 2026-10-28
Cost to do it: The domestic INR on unrelated bank interest (4.5 percent effective) is already below the 6 percent cap.
Example: Interest of PYG 100,000,000 to a related UAE company: domestic INR PYG 15,000,000 equals the cap. / Interest of US$17,041: INR US$2,556.Ley Nº 6230/2018 (United Arab Emirates) and Ley Nº 6387/2019 (Qatar), UAE art. 11, 12 and 13; Qatar art. 10, 11 and 12, 2019-09-27 official text · verified 2026-10-28
6. Unilateral relief. A resident company's foreign income is Paraguayan source for IRE unless it paid foreign income tax at a rate equal to or above the IRE rate; art. 134 applies to avoid international double taxation and the DNIT sets the proof required.
Cost to do it: Keep foreign tax receipts and returns.
Example: Foreign income on which the Paraguayan company itself paid foreign income tax at 10 percent or more is outside IRE once payment is proven. / Interest on a Miami deposit with no US tax is taxed at 10 percent IRE.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 6 and 134, 2019-09-25 official text · verified 2026-10-28
Cost to do it: Keep foreign tax receipts and returns.
Example: Foreign income on which the Paraguayan company itself paid foreign income tax at 10 percent or more is outside IRE once payment is proven. / Interest on a Miami deposit with no US tax is taxed at 10 percent IRE.Ley Nº 6380/2019 De modernización y simplificación del sistema tributario nacional, Art. 6 and 134, 2019-09-25 official text · verified 2026-10-28
| Country | Law | Dividends | Interest | Royalties |
|---|---|---|---|---|
| No treaty (domestic) | Ley 6380 | 15% IDU | 4.5% unrelated bank, 15% related | 15% (related or residual) |
| Spain | 7271/2024 | 5% (50% parent), 0% pension fund, 10% other | 5% | 5% |
| Chile | 2965/2006 | 10% | 10% banks and insurers, 15% other | 15% |
| Uruguay | 6276/2019 | 15% | 15% | 15%; technical fees 15% |
| United Arab Emirates | 6230/2018 | 15% | 6% banks and insurers, 15% other | 15% |
| Qatar | 6387/2019 | 15% | 6% banks and insurers, 15% other | 15% |
| Taiwan | 3972/2010 | See treaty text | See treaty text | See treaty text |
| Argentina, Brazil, United States | None | Domestic | Domestic | Domestic |
Treaty caps on source taxation (approval laws on the DNIT site, verified 28 October 2026); domestic rate shown for comparison
Worked example
- A Paraguayan S.A. pays a dividend of US$100,000 (PYG 586,831,000).
- To a US parent: 15 percent IDU, US$15,000; net US$85,000.
- To a Spanish parent holding 100 percent for over a year: 5 percent, US$5,000; net US$95,000.
- To an Argentine parent: no treaty, 15 percent, US$15,000; Argentine side relief depends on Argentine law (see The Argentine Thread guide).
Step by step
- Identify the beneficial owner's residence and check the DNIT list for a treaty.
- Obtain a residence certificate from the foreign authority for the relevant year.
- Check holding period and percentage conditions (Spain 50 percent for 365 days) and any principal purpose or limitation on benefits clauses.
- Apply the lower rate at withholding and keep the file for the five year prescription period.
- For Argentine counterparties, plan on domestic rates on both sides.
Common traps
- Most caps are 15 percent, the same as the domestic IDU and related party INR, so the treaty often saves nothing on those flows.
- There is no treaty with Argentina, Brazil or the United States.
- The DNIT treaty list page shows the five older treaties; the Spain treaty is published separately among DNIT laws.
- Anti abuse clauses (principal purpose test in the Spain treaty, limitation on benefits in the Uruguay treaty) can deny relief to conduit holding companies.
Sources
- DNIT, international agreements (tax treaties)
- DNIT, Ley Nº 7271/2024 Spain treaty
- DNIT, Spain treaty in force 14 October 2024 (news, 12 November 2024)
- DNIT, Ley Nº 2965/2006 Chile treaty
- DNIT, Ley Nº 6276/2019 Uruguay treaty
- BACN, Ley Nº 6276/2019 (promulgation 13 February 2019)
- DNIT, Ley Nº 6230/2018 UAE agreement
- DNIT, Ley Nº 6387/2019 Qatar agreement
- DNIT, Ley Nº 6380/2019 text
- Banco Central del Paraguay, reference exchange rates (28 October 2026)
Related pages
- taxes/dividend-tax-idu
- taxes/non-resident-withholding-inr
- start/paraguay-vs-argentina-ease-of-doing-business
- fx/fx-and-capital-flows
- https://theargentinethread.com/guide/
- /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
Get rule changes weekly
Free. One email a week from The LatAm Thread.
One more step after you press the button: we take you to Substack, where your email is already filled in. Confirm there to start. No spam, unsubscribe anytime, we never share your address. By subscribing you agree to the privacy policy.