Questions about Paraguay tax residency ❓

Does Paraguay tax income I earn abroad?

Generally not, if the work is done outside Paraguay. Paraguay taxes income by source, not by where you live: income from work done in Paraguay, goods located there and rights used economically there is taxed (Ley 6380/2019, Art. 48). Pay for work you do outside Paraguay is generally not taxed, unless the client is a Paraguayan taxpayer (Art. 48 num. 3). Keep records that show where you did the work and who paid you, because Paraguay can tax money it can't trace to a foreign source.

Is work I do while in Paraguay taxed?

Yes, even for foreign clients: 10% VAT plus personal income tax of up to 10%. Spending time in Paraguay doesn't make your foreign income taxable. Doing the work there does.

Does Paraguay tax my US LLC's income?

It depends on where you do the work, not on the LLC. Pay for work you do outside Paraguay is generally foreign income, whoever bills it, unless the client is a Paraguayan taxpayer (Ley 6380/2019, Art. 48 num. 3). Work you do from Paraguay is Paraguayan income, whatever entity bills it. The LLC still files with the IRS, and some home countries' exit or CFC rules can still reach you or the company.

Do I stop paying tax in my home country?

Not automatically. Your home country decides whether you're still its tax resident, using its own test. Spain looks at your days there and where your economic life is, and presumes you're resident if your spouse and minor children live there. The UK uses a day count and a ties test. A Paraguayan document doesn't decide either test. And Spain's treaty with Paraguay doesn't protect income that Paraguay's territorial rules leave untaxed: if Spanish law reaches that income, Spain can tax it as if there were no treaty.

I'm a US citizen. Does this help?

Not with US tax. The US taxes its citizens wherever they live, and Paraguay residency doesn't change that.

Do I have to live in Paraguay?

No. You attend the appointments in person in Paraguay. Rules apply to keep residency.

Can I get permanent residency later?

You can apply for it. Temporary residency is granted for up to 2 years and can be extended for another period of the same length. You apply for permanent residency in the last 90 days before your temporary residency expires; if you miss that window, you start over. You show economic solvency under DNM Resolution 407/2026 through one of its categories, for example as a remote worker with a work certificate, a professional, a shareholder of a Paraguayan company or a retiree. There's no published minimum amount, and Migraciones can refuse.

Is this citizenship or a passport?

No. You get residency and a Paraguayan ID card (cédula). Citizenship is a separate process that takes years longer.

How long does it take?

It depends on your nationality and your documents.

Is Paraguay a tax haven?

No. Paraguay wasn't on the EU list of non-cooperative tax jurisdictions adopted in February 2026, and it can exchange tax information on request with 138 partners. As of October 2026 it hasn't signed the CRS agreement for automatic exchange and doesn't yet share bank data automatically; the OECD records an intention to start in 2027.

What does it take to keep a RUC up to date?

A monthly VAT return, even at zero, and an annual income-tax return. We can file them for you.

Is a Paraguayan tax residency certificate enough?

Not on its own. The DNIT, Paraguay's tax authority, issues it to a taxpayer whose RUC is active and up to date, and it's valid for one year (RG 65/2020). It isn't automatic: practitioners report that the DNIT sometimes asks for more. Holding permanent residency makes you a Paraguayan tax resident by decree (Decreto 3181/2019, Art. 2). Your home country can still claim you on its own grounds: Spain's tax administration treats a foreign certificate as defeating only its 183-day test.

General information, not tax or legal advice.