Paraguay is consolidating its position as an attractive destination for foreign capital by offering five tax advantages, according to official information from the Ministry of Economy and Finance (MEF) and the National Directorate of Tax Revenue (DNIT).
The first advantage is access to minimum income or profit tax rates. Second, the effective tax burden can be below 5% in some cases. Value Added Tax (VAT) ranges from 5% to 10% on basic food basket items, medicines, acquisitions, and rentals, representing the third advantage.
The country does not levy a wealth tax, except for real estate tax, which constitutes the fourth advantage. The fifth advantage consists of preferential regimes with minimum rates, such as Law 60/90 (Maquila), the Investment Guarantee Law, and Free Trade Zones.
Additionally, the Corporate Income Tax (IRE) taxes commercial, industrial, agricultural, or service activities at 10%. The Dividend and Profit Tax (IDU) applies rates of 8% for residents and 15% for non-residents on profit distributions. The Non-Resident Income Tax (INR) has a nominal rate of 15%, but a reduced tax base results in an effective rate of 4.5% or 7.5%. The Selective Consumption Tax (ISC) varies by product: tobacco (18% to 24%), alcoholic or sugary beverages (9% to 12%), and other goods (1% to 6%).