Paraguay · Tax on foreign income
Does Paraguay tax foreign income? A guide for Americans
Short answer
Paraguay taxes income from Paraguayan sources. A retiree living on US pensions and interest owes no Paraguayan income tax, however long they stay.
What you'd pay, by situation
| Retiree on US income $0 a year at 90, 182 or 365 days | US pensions, Social Security and interest don't become Paraguayan income because you live here. No social security is due either. |
|---|---|
| Remote worker paid from the US | Not settled yet: how tax and social security are paid when a US employer has no presence here. Still being checked |
| Working for a local employer On $60,000 a year: about $6,300 income tax plus $5,400 social security | In your first year as a temporary resident, about 10.5% of pay for work in Paraguay, plus 9% social security. |
Not yet verified The retiree and payroll results, worked out from the official tax rules.
Still being checked Tax and social security when you work remotely for a US employer.
How it works
- Tax residence follows permanent residence: not a day count. Temporary residents are taxed as non-residents.
- What's taxed: income from Paraguayan sources, such as work done here. Non-residents pay about 10.5% of gross pay.
- Social security: local employees pay 9% to the national system (IPS).
- Your US return: you still file every year. Paraguayan tax may be credited against US tax; see a tax adviser.
- No Social Security agreement: the US and Paraguay have none, so US payroll tax continues.
Taxes in Paraguay, with worked examples → The full Paraguay guide →
Questions people ask
Does Paraguay tax US Social Security and pensions?
US pensions, Social Security and interest don't become Paraguayan income because you live here. No social security is due either.
Remote worker paid from the US in Paraguay: what would I pay?
Not settled yet: how tax and social security are paid when a US employer has no presence here. (Still being checked) Ballpark: .
Working for a local employer in Paraguay: what would I pay?
In your first year as a temporary resident, about 10.5% of pay for work in Paraguay, plus 9% social security. Ballpark: On $60,000 a year: about $6,300 income tax plus $5,400 social security.