The Quick Answer
Paraguay non-resident tax (INR) withholds Paraguay-source income at effective rates of 4.5% to 15%, depending on the type of income, not on your circumstances. The law sets one nominal rate, 15%, but presumes your net income to be 30%, 50%, 70% or 100% of the gross amount and taxes that presumed base (Arts. 75-76, Law 6380). A non-resident selling real estate is blocked at the notary for 1.5% IVA plus 4.5% INR (RG 42/2020), dividends carry 15% through the separate IDU, and the withholding is single and final, not refundable (Art. 77).
What the INR Is, and Why the Real Rates Are Hidden
Paraguay non-resident tax, the Impuesto a la Renta del No Residente or INR, is the tax Paraguay collects on Paraguay-source income paid to people and companies that are not tax resident here. It lives in Título IV of Law 6380/2019, Articles 71 to 79, and it works almost entirely through withholding: someone in the payment chain hands the tax to DNIT before the money reaches you.
The mechanism has two moving parts, and most summaries get the second one wrong. Part one is simple: Article 76 sets a single nominal rate of 15%. Part two is the base. Instead of asking what your costs were, Article 75 fixes your taxable net income by conclusive presumption: the law deems your net income to be a set percentage of the gross amount, 30%, 50%, 70% or 100% depending on the income type. The statute says this is done "sin admitir prueba en contrario", without admitting proof to the contrary. You cannot submit receipts. You cannot argue you broke even.
Multiply the two parts and you get the effective rates. A 30% presumed base taxed at 15% costs 4.5% of the gross. A 50% base costs 7.5%. A 70% base costs 10.5%. A 100% base costs the full 15%. That is the entire arithmetic of this tax, and it is why the question "what is the Paraguay withholding rate?" has four correct answers.
The obligation arises at the moment the funds are made available, remitted abroad or paid, whichever happens first (Art. 74). DNIT appoints the withholding agents: notaries, attorneys-in-fact, representatives, card processors, or anyone else who intervenes in the operation (Art. 77). Article 77 then ends with the sentence that matters most for planning: what is paid "constituirá pago único y definitivo", a single and final payment. There is no annual return for the recipient, no refund procedure, and no credit against other Paraguayan taxes. Some advisory sites, including paraguaytax.com, describe the withholding as refundable. It is not, and a plan built on recovering it later is built on nothing.
What counts as Paraguay-source is fixed by the sourcing articles of the same law (Art. 73 for non-residents, Arts. 57-61 for residents). The short version: income from property located in Paraguay, services used in Paraguay, and amounts paid by Paraguayan payers are in. Dividends, royalties and fees flowing out of a Paraguayan company are in. Pure foreign income with no Paraguayan payer and no Paraguayan asset is out. The boundary from the resident side is covered in our foreign-source income rules guide.
The Effective Rate Table: All of It, From the Statute
The table below reproduces the withholding schedule of Law 6380/2019: every income type, the presumed net base from Article 75, the nominal rate from Article 76, and the resulting effective rate on the gross amount. This is the table the professional summaries publish in fragments, if at all, and it is the only part of this page most readers need.
| Income type (non-resident recipient) | Presumed net base | Nominal rate | Effective rate on gross |
|---|---|---|---|
| Dividends, utilities or profits from Paraguayan entities or PEs, including head office remittances and related parties (Art. 75 n.6) | 100% | 15% | 15% |
| Interest and commissions on loans or credit from foreign banks, public or private entities and multilateral credit bodies (non-related), including bonds placed abroad through recognized markets (Art. 75 n.1(a)) | 30% | 15% | 4.5% |
| Interest, royalties or technical assistance between related parties (head office and branch) (Art. 73 n.1 + Art. 75 n.6/7) | 100% | 15% | 15% |
| Royalties: use or copyright, industrial property, software licenses, know-how, image rights (Art. 73 n.1/6 + Art. 75 n.7) | 100% | 15% | 15% |
| Technical assistance or services from abroad linked to IRE-taxed income (Art. 73 n.9/11 + Art. 75 n.7) | 100% | 15% | 15% |
| International transport of persons; freight by sea, river, air or land (export freight is exempt) (Art. 75 n.1(b); exemption Art. 79 n.3) | 30% | 15% | 4.5% |
| Containers (transfer of use) (Art. 75 n.1(c)) | 30% | 15% | 4.5% |
| Performing arts and live shows (theater, dance, music, circus, magic) (Art. 75 n.1(d)) | 30% | 15% | 4.5% |
| Insurance, co-insurance and reinsurance premiums covering Paraguayan risks, including mixed Paraguayan and foreign risks (Art. 75 n.1(e)) | 30% | 15% | 4.5% |
| International calls, audio and video transmission, data over internet protocol, and other digital services rendered from abroad (Art. 75 n.1(f)) | 30% | 15% | 4.5% |
| Capital gains on movable property located in Paraguay (Art. 75 n.1(g)) | 30% | 15% | 4.5% |
| Capital gains on real estate located in Paraguay (Art. 75 n.2) | 30% of the sale price | 15% | 4.5% |
| Renting or leasing real estate in Paraguay (Art. 75 n.3) | 50% | 15% | 7.5% |
| Personal services, professional or not, including services rendered abroad to IRE or IRP taxpayers (Art. 75 n.4) | 70% | 15% | 10.5% |
| Transfer of shares or quotas of Paraguayan companies (Art. 75 n.5) | Lesser of (sale price minus nominal value) or 30% of the sale price | 15% | Up to 4.5% |
| Any other amount made available, remitted or paid abroad not listed above, excluding imports of goods (Art. 75 n.6/7) | 100% | 15% | 15% |
The shares row deserves a note. When a non-resident transfers shares in a Paraguayan company, the base is the lesser of the sale price minus the nominal value, or 30% of the sale price, so the tax never exceeds 4.5% of the price (Art. 75 n.5). When both sides of the sale are non-residents, the Paraguayan issuing company itself collects the tax (Art. 77).
A short exemption list sits alongside the schedule (Art. 79): interest and gains on Paraguayan sovereign and municipal debt, export freight, and gains on securities traded through the local CNV-regulated stock exchange are not taxed, and diplomats' remuneration is covered by reciprocity. Everything else on the list above is withheld.
Selling Paraguayan Real Estate: The Notary Blocks the Tax at the Escritura
Real estate is where non-resident sellers get surprised, because the collection point is the deed itself. General Resolution 42/2020 appoints the intervening notary as withholding agent for 100% of the tax when the seller is a non-resident (Art. 3). Two taxes come out at the signing: IVA at 5% on a base of 30% of the sale value, an effective 1.5%, and INR at 15% on the same 30% base excluding IVA, an effective 4.5%.
The arithmetic on a $200,000 sale with IVA included in the price: divide the price by 1.015, which gives $197,044 (RG 42/20, Art. 8). The IVA base is 30% of that, $59,113, and IVA at 5% is $2,956. The INR base is 30% of the price with the IVA taken out, so $200,000 minus $2,956 leaves $197,044, and 30% of that is again $59,113; INR at 15% is $8,867. The notary withholds $11,823 in total, about 5.9% of the price, before the deed is signed.
Resident individual sellers go through the same notary but under a different tax: IRP at 8% on the 30% presumed base, an effective 2.4%, with an election to be taxed on the real gain instead, the sale price minus the documented purchase price and costs, recorded in the deed (RG 42/20, Arts. 2 and 6). That real-gain election is written for resident sellers; the non-resident withholding stands as computed. One more carve-out: sales of land in subdivided lots (loteo) are handled by the loteadora company as withholding agent, and RG 35/2020 expressly excludes those sales from notary retention (Art. 10). The resident angles, including the flat 8% capital income rate, are covered in our capital gains guide.
Dividends Are IDU, Not INR: 15% vs 8%
Dividend withholding on non-residents shows the same 15% as the INR catch-all, but it is a different tax. Distributions by companies constituted in Paraguay, including permanent establishments of foreign companies, are taxed by the Impuesto a los Dividendos y Utilidades, the IDU (Art. 40, Law 6380). The rate depends on where the recipient lives, not where the company is: 15% when the recipient is a non-resident, 8% when the recipient is a Paraguayan resident (Art. 43).
That split is why the same dividend can cost 8% or 15%. A foreign shareholder of a Paraguayan company pays 15%; once that person becomes a Paraguayan tax resident, the rate drops to 8% on future distributions. The INR schedule lists dividends at 15% (Art. 75 n.6) only to keep the two systems consistent. The mechanics, timing and treaty angles are in our dividends and IDU guide.
Remote Services and Digital Sales Into Paraguay
Services sold from abroad into Paraguay split into three very different rates, and the classification is worth real money. Digital services sit on a 30% presumed base, an effective 4.5%: international calls, audio and video transmission, data over internet protocol, and other digital or similar services rendered from abroad (Art. 75 n.1(f)). The sourcing rule is Article 73 n.12: the law treats the service as Paraguayan when the transmission or use lands here.
Personal services are different. When a foreign professional or firm personally performs services for a Paraguayan client, even from abroad, the presumed net is 70% of the gross and the effective rate is 10.5% (Art. 75 n.4; sourcing at Art. 73 n.9/10). And when the payer is a related party, a branch paying its head office, a subsidiary paying its parent royalties, interest or service fees, the base is 100% and the rate is the full 15% (Art. 75 n.6/7; sourcing at Art. 73 n.1). Technical assistance to a Paraguayan related party lands on the same 100% base.
INR is not necessarily the end of it. IVA, Paraguay's VAT, can attach to cross-border services and transfers as a separate obligation, withheld separately, exactly as it is on the real estate sale above. Budget for both, and confirm the IVA treatment of your specific service before you quote a price to a Paraguayan client.
When Your Activity Becomes a Permanent Establishment
The INR applies while your activity in Paraguay stays remote. Cross a line and you leave the withholding regime entirely. Article 155 of Law 125/1991 defines a permanent establishment as including, among other cases: a branch or agency, a factory, plant or workshop, a farming establishment, a mine or any other place of extraction of natural resources, or a construction or assembly site whose duration exceeds twelve months. The second prong is a person who has and habitually exercises powers to conclude contracts in the foreign enterprise's name.
What the law does not say is that any habitual work from Paraguay creates a permanent establishment. That phrasing circulates in expat summaries, but the word "habitual" appears in the statute only attached to contract-concluding powers, never to work in general. The distinction matters because a permanent establishment of a foreign entity is an IRE taxpayer in its own right (Art. 2.7, Law 6380): it files corporate returns on its Paraguayan profits instead of suffering the withholding above. Where the line sits for someone running a foreign company from Paraguay, including the common US LLC setup, is covered in our US LLC and foreign entities guide.
Treaty Relief: Real, but Only With Six Countries
A double tax treaty can cut these withholdings, and Paraguay's network is thin: six income tax treaties are in force, with Chile, Taiwan, the United Arab Emirates, Uruguay, Qatar and Spain. The Spain treaty, in force since 14 October 2024, cuts dividend withholding from 15% to 5% for a company beneficial owner holding more than half the payer, or 10% otherwise. The United States and the United Kingdom have no treaty with Paraguay at all, so for most readers the domestic rates in the table above are the final word.
Treaty rates do not apply by default. The payer needs the documentation the treaty and DNIT require before withholding at the reduced rate, and missing paperwork means the full domestic rate leaves with the payment. The full list, dates and rate detail is in our double tax treaties guide. If your country of residence is not on that list, the table above is your answer.
Two Worked Examples
The non-resident landlord
A non-resident owns an apartment in Asunción rented at $1,200 a month, $14,400 a year. Renting real estate in Paraguay carries a 50% presumed base (Art. 75 n.3), so the base is $7,200. The nominal 15% rate (Art. 76) on that base is $1,080, which is exactly 7.5% of the gross rent. No deduction for expenses, property manager fees or mortgage interest: the base is presumed and conclusive. Whoever DNIT has appointed in the payment chain withholds the tax (Art. 77), the payment is final, and the landlord receives $13,320 and files nothing in Paraguay.
The foreign company selling to Paraguayan clients
A foreign company bills Paraguayan clients $100,000 a year. The tax depends entirely on what it sells. If it sells a digital product, software access, streaming or data over the internet, the base is 30% (Art. 75 n.1(f)): $30,000, tax at 15% is $4,500, an effective 4.5%. If it sends a consultant who personally performs the services, the base is 70% (Art. 75 n.4): $70,000, tax $10,500, an effective 10.5%. And if the bills flow between related companies, its own Paraguayan subsidiary paying it royalties or service fees, the base is 100% (Art. 75 n.6/7) and the tax is the full $15,000. Same revenue, three answers, and that is the reason a rate table matters more than a rate.
How We Help
Non-resident outcomes are usually decided before anyone withholds: how a contract is classified, whether a structure creates a permanent establishment, whether a treaty rate is documented in time, and what the notary will hold back at the escritura. If you have Paraguay-source income or a Paraguayan asset and you are not resident here, we will look at the specific payment and tell you which row of the table you are on, with the article numbers attached. More questions are answered in our tax FAQ, and the recurring filings that residents and RUC holders owe are covered by the service below.
RUC Filing Service
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