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Taxes in Paraguay


Paraguay is becoming a popular choice for savvy entrepreneurs looking to increase their brand presence in LATAM markets.

Paraguay is an attractive country to set up in. This is because of its ease of access, and rapidly growing middle class boosting expenditure and growth. Paraguay’s straightforward tax requirements and relaxed stance on maintaining a presence in the country make it the perfect option for digital nomads when deciding how to declare taxes.

Benefits of declaring taxes in Paraguay
Paraguay has the lowest tax rate in Latin America, at 10%. Other booming economies such as Brazil and Chile apply a tax rate of around 30%. Paraguay is therefore considerably more competitive.

The corporate income tax is applicable to all companies no matter what practices they are involved in. This will be the most constant cost and sits at a standard rate.

Furthermore, the value-added tax (VAT) rate is one of the lowest in Latin America. Maintaining low tax expenses facilitates a welcoming environment for setting up a trading business in Paraguay.

Paraguay’s non-resident personal income tax rate also sits at a comparatively low rate. This tax sits at a rate of 10%. Nearby, non-resident personal income tax in Mexico is 15-30%. Paraguay, therefore, is a considerably beneficial option for tax declaration in terms of standardization and cost-efficiency.

What are corporate tax rates like?
Paraguay is an attractive country for commercial operations with regard to corporate tax. As every country differs in its tax rates, every country poses different opportunities. The same counts for Paraguay.

Paraguay applies the following taxing and accounting rules and rates:

Paraguay applies a standard income tax rate of 10%.
Paraguay tax declaration
Paraguay’s standardized tax system is simple to navigate. Plus, there is no income tax on revenue earned outside of the country.

The country’s VAT sits at a standard rate of 10%. These returns must be filed monthly. You are required by law to register for VAT when incorporating in Paraguay.
Dividends distributed to non-resident individuals or entities are subjected due to a 15% withholding tax rate.
The standard tax rate makes Paraguay’s tax system simple to navigate. Further to this, there is no income tax on revenue earned outside of the country. This offers competitive tax conditions for people and businesses with additional overseas income.

The fiscal year in Paraguay starts on 1 January and finishes on 31 December. You must submit your taxes within 4 months of the end of the previous fiscal year.

Source: bizlatinhub com

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