How Paraguay Residency Affects Your Tax Obligations

One of the biggest draws of Paraguay residency is its favorable tax environment. But what exactly changes once you become a resident? Here’s how residency impacts your tax situation — and what you need to do to stay compliant.

Tax Rules for Residents

• Paraguay does not tax foreign-source income.

• Only locally generated income (from a business, job, or property inside Paraguay) is subject to tax.

• No wealth tax, inheritance tax, or capital gains tax on foreign assets.

When Do You Become a Tax Resident?

Having residency doesn’t mean automatic tax residency. To be recognized by tax authorities, you must register for a RUC (Registro Único del Contribuyente).

Requirements for Tax Registration

• Residency card (Cédula)

• Local address

• Supporting documents for activity (business, rental, banking)

Benefits of Tax Residency

• Legal way to reduce global tax exposure

• Ability to obtain Tax Residency Certificate

• Access to local banking and investment tools

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