Taxes in Paraguay (10-10-10): IRE, IVA, IDU, IRP and simplified regimes

Taxes in Paraguay are known by the nickname "10-10-10", which has a basis in law but tells only part of the story. Using Law 6380/2019 and the criteria of the DNIT (Dirección Nacional de Ingresos Tributarios, Paraguay's national tax authority), this guide explains what a company pays, what an individual pays and what changes if the partner lives abroad, with numerical examples. It is useful both for foreigners considering setting up in Paraguay and for Paraguayans with their own company or business.

What taxes are there in Paraguay?

There are five main taxes, all under Law 6380/2019: the IRE, 10% on companies' net income; the IVA (VAT), at 10% or 5%; the IDU, 8% or 15% on distributed profits; the IRP, 8% to 10% for resident individuals; and the INR, 15% on a deemed base, for non-residents.

Rates in force on 26/09/2026, checked in Law 6380/2019 and on the DNIT's pages on IDU, IVA and IRP.

"10-10-10" does not mean a total tax burden of 10%. Each 10% falls on a different base: the IRE on the company's profit, the IVA on sales and the IRP on the individual's income. The nickname leaves out the IDU, the IPS social security contributions on salaries and the taxes of the country where the partner lives.

How does the IRE work?

The IRE taxes the company's net income at 10% and is settled once a year. It covers Paraguayan-source income, which art. 6 of Law 6380/2019 extends for resident companies: it includes interest, dividends and exchange differences from abroad, and income from activities abroad that did not pay an income tax of at least 10% there.

The IRE comes with other annual tasks:

• Financial statements, with the composition and use of profits detailed in the notes, as required by RG DNIT 49/2026.
• Decision on profits: what is distributed pays IDU; what goes to reserves does not, until it is released.

How much IDU is paid when profits are distributed?

The IDU is 8% if the partner is resident in Paraguay and 15% if not (Law 6380/2019, art. 43). The company withholds it when paying, and amounts allocated to reserves do not pay IDU until they are released. In an SRL, the tax arises according to the bylaws or in the fourth month after the financial year-end.

Important: the 8% IDU rate is for resident partners. For the DNIT, an individual is a tax resident when they hold permanent residency (Decree 3181/19, art. 2). The cédula (ID card) alone is not enough, and the 8% rate is not a benefit of any investment programme: it is the general rate for residents.

How much profit is left after IRE and IDU?

For every 100 of net income, the company pays 10 in IRE and can distribute 90. With an 8% IDU (resident partner), the partner receives 82.8; with a 15% IDU (non-resident), 76.5. The Paraguayan tax burden on profit is therefore 17.2% or 23.5%, respectively.

Illustrative example with the rates in force on 26/09/2026 (Law 6380/2019). It assumes all profit is distributed and that accounting profit equals taxable net income. It does not include IVA, IPS or taxes in the partner's country.

If, in that example, the company distributed only half (45) and allocated the rest to reserves, that year's IDU would be 3.6 (resident partner) or 6.75 (non-resident). The IRE of 10 is paid regardless.

How is IVA settled each month?

The company files its IVA every month on the DNIT's Form 120 and pays the difference between the IVA it charged on sales and the IVA it paid on purchases, backed by valid receipts. The standard rate is 10%, and there is a reduced 5% rate for the basic food basket, real estate and certain other items.

Simplified example using the 10% standard rate (DNIT — IVA), as of 26/09/2026. In practice, each receipt must meet the DNIT's requirements.

In addition, every month, on the IVA due date (which depends on the last digit of the RUC, the taxpayer ID), IVA taxpayers record their sales, purchase, income and expense receipts in Marangatu, the DNIT's online system: this is the receipt register of RG 90/2021, in force in 2026 with the changes introduced by RG DNIT 12/2024. For IRE SIMPLE and IRP-RSP taxpayers, the register is annual, in February.

Since 01/04/2025, every new legal entity issues only electronic invoices, through e-Kuatia or e-Kuatia'i (RG DNIT 21/2024, art. 9). For existing taxpayers, RG DNIT 52/2026 brings around 3,000 taxpayers into SIFEN (the national electronic invoicing system) in 6 groups, between 01/06/2026 and 01/09/2027.

What obligations does the company have after opening?

The company files IVA and the RG 90 register every month, settles the IRE and submits its financial statements once a year and, if it has employees, pays IPS contributions every month and complies with the MTESS (Ministerio de Trabajo, Empleo y Seguridad Social, the labour ministry), which requires the Labour Information Books to be confirmed once a year. Every new company also issues electronic invoices.

Obligations in force on 26/09/2026. The Labour Information Books replaced the former MTESS payroll forms, and the system generates them from the monthly salary reports; failing to confirm them carries a fine.

With employees, the employer also registers in the MTESS employer register (REOP), updates its details every year between 1 January and 31 March, reports hires and terminations within 30 business days and reports salaries every month.

Do individuals pay income tax in Paraguay?

Yes: resident individuals pay the IRP, and non-residents pay the INR. On personal services the rate is progressive: 8% on the first bracket of net income, 9% on the second and 10% on the highest. Capital income pays 8%. A resident who physically works in Paraguay, including as a self-employed person or freelancer, pays IRP on personal services (IRP-RSP).

Brackets from Law 6380/2019 (arts. 60 and 69), checked on 26/09/2026. The Executive may update the guaraní amounts in art. 69 for inflation (CPI) (art. 139): confirm the current brackets with the DNIT.

Under art. 69 of the law, anyone whose gross income from personal services is below the annual threshold set there does not pay IRP, although they must meet the formal obligations. As that threshold can also be updated, confirm it before planning.

What taxes does a non-resident pay?

It depends on how the income is earned. A partner in a Paraguayan company pays the 15% IDU on the profits received, withheld by the company. A non-resident with other Paraguayan-source income pays the INR, 15% on a deemed base set by Law 6380/2019. The country of residence also applies its own rules.

For the DNIT, an individual is a tax resident in Paraguay when they hold permanent residency (Decree 3181/19, art. 2). The tax residency certificate (RG 65/2020) is requested with a valid cédula, an up-to-date RUC if you are a taxpayer and a travel history certificate from the DNM (the immigration authority), which has its own fee. It is issued in 10 business days, is valid for 1 year and is used to apply double taxation treaties.

What are IRE SIMPLE and RESIMPLE?

They are simplified regimes for smaller taxpayers, with annual revenue caps set by law. IRE SIMPLE is for sole proprietorships and residual entities; the S.A. and the SRL are excluded. RESIMPLE is for sole proprietorships with lower revenue: it pays a fixed monthly instalment based on revenue level and does not settle IVA.

Law 6380/2019, arts. 26 and 27, and the DNIT page on IRE and RESIMPLE, as of 26/09/2026. Art. 139 allows the RESIMPLE amounts (art. 27) to be updated for inflation, but not the IRE SIMPLE cap (art. 26): confirm the current caps and instalments with the DNIT.

Example: under RESIMPLE, a sole proprietorship pays 12 fixed instalments a year and does not settle IVA. If its revenue exceeds the regime's cap, RESIMPLE no longer applies.

Whether an EAS can opt for IRE SIMPLE should be confirmed in your case. And remember that a sole proprietorship requires a Paraguayan cédula, because the DNIT only registers foreigners in the RUC if they hold one.

Are there special regimes for trade and investment?

Yes, but none is automatic. The Shopping Tourism Regime (Turismo de Compras), used by retailers in Ciudad del Este, has an effective IVA of 1.25% and an IRE advance payment of 1%. Investment Law 7548/2025 exempts capital goods from import duties and IVA, and exempts IDU only for large projects.

Rules checked on 26/09/2026. More information on the DNIT page on Shopping Tourism.

Can taxes paid in Paraguay be credited in my country?

It depends on your country's law and on whether there is a double taxation treaty with Paraguay. The DNIT publishes the list of treaties in force. With Brazil, for example, there is no treaty in force: one was signed in 2000 and Brazil approved it through Legislative Decree 972/2003, but it never entered into force.

• Check the list: DNIT international tax treaties.
• Exchange of information: Paraguay is party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Law 6656/2020, in force since 01/11/2021).
• There is no offshore regime: Paraguayan companies are local companies that pay IRE, IVA and IDU.

Important: EC Paraguay handles the Paraguayan side: accounting, tax returns and documentation of what was paid. How the company or its dividends are taxed in your country must be confirmed by a qualified accountant there.

If you already have a company, our accountant in Ciudad del Este service covers the monthly IVA and RG 90, the annual IRE and financial statements, and IDU withholding. If you have not opened it yet, start with our guide to opening a company in Paraguay as a foreigner.

General information, updated on the date shown. It does not replace a review of your case by a licensed professional.