Paraguay Tax Data Center 2026: Rates, Revenue & OECD Comparison

Paraguay runs one of the simplest and most competitive tax regimes in the western hemisphere — and the numbers behind that claim are more specific than the typical shorthand suggests. This data center lays out the actual rates, the actual tax-to-GDP ratio, and the actual international comparisons so that anyone evaluating Paraguay residency or relocation can make decisions based on verified figures rather than overheated claims.

The headline rates are genuinely simple: 10% on personal income, 10% on corporate income, and 10% on value-added tax. There are no brackets, no progressive tiers, no regional surcharges, and no additional levies baked into the base rates. For comparison, the average OECD personal income tax rate at median income is above 25% and the average CIT rate across OECD countries is above 25%. Most LAC countries have multi-tier PIT systems with top marginal rates above 30%. Paraguay's 10% flat rate is not just lower — it is structurally simpler, which reduces compliance costs and eliminates the possibility of bracket creep as income rises.

The 14.5% tax-to-GDP ratio puts Paraguay among the lowest-taxed countries in the world by this aggregate measure. The LAC average is 21.3% and the OECD average is 33.8% — meaning Paraguay taxes roughly half what OECD countries do as a share of national income. This does not mean Paraguay has no taxes: property taxes exist, import tariffs apply, and some excises exist on specific goods. But the overall fiscal extraction is structurally lower than regional and global peers.

The territorial tax system is the other material advantage. Under Law 6381/2019, income sourced from activities performed entirely outside Paraguay is exempt from Paraguayan income tax. For remote workers earning foreign-source income, digital nomads, and investors with foreign portfolio income, this means the 10% PIT may simply not apply to their situation at all — if the income is properly characterized as foreign-source. The territorial system does not exempt income earned inside Paraguay, and proper characterization of source requires understanding where the work is performed. The details matter, which is why the Territorial Tax Explained page goes deeper.

The Low-Tax Scorecard on the child page extends this analysis to a 26-country comparison across five tax dimensions: personal income tax, corporate income tax, VAT, property tax, and social security contributions. It compares effective tax burdens across the peer group with Paraguay's 10/10/10 structure as the benchmark.

For anyone evaluating Paraguay as a tax base — whether for residency, relocation, or business establishment — this data center is the starting point. The individual child pages carry the full detail.