{"id":8578,"date":"2026-02-18T13:07:00","date_gmt":"2026-02-18T17:07:00","guid":{"rendered":"https:\/\/www.mersanlaw.com\/?p=8578"},"modified":"2026-03-16T13:38:13","modified_gmt":"2026-03-16T17:38:13","slug":"tax-residency-in-paraguay-legal-requirements-and-common-mistakes","status":"publish","type":"post","link":"https:\/\/www.mersanlaw.com\/pt\/blog-eng\/tax-residency-in-paraguay-legal-requirements-and-common-mistakes\/","title":{"rendered":"Tax Residency in Paraguay: Legal Requirements and Common Mistakes"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"8578\" class=\"elementor elementor-8578\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1f49a510 e-flex e-con-boxed e-con e-parent\" data-id=\"1f49a510\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1e1eb921 elementor-widget elementor-widget-text-editor\" data-id=\"1e1eb921\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"25\" data-end=\"253\"><span style=\"color: #000000;\">During 2025, <strong data-start=\"38\" data-end=\"71\">38,236 residency applications<\/strong> were filed in Paraguay, mainly from Brazilian citizens. This represents a <strong data-start=\"146\" data-end=\"181\">31.3% increase compared to 2024<\/strong> and consolidates a <strong data-start=\"201\" data-end=\"252\">203.5% cumulative increase over the last decade<\/strong>.<\/span><\/p><p data-start=\"255\" data-end=\"389\"><span style=\"color: #000000;\">Why are so many foreigners seeking to relocate to Paraguay? This trend can be explained primarily by the convergence of three factors:<\/span><\/p><ul data-start=\"391\" data-end=\"533\"><li data-section-id=\"1cgi8yl\" data-start=\"391\" data-end=\"438\"><p data-start=\"393\" data-end=\"438\"><span style=\"color: #000000;\">A simple and accessible immigration regime.<\/span><\/p><\/li><li data-section-id=\"dgkkvv\" data-start=\"439\" data-end=\"476\"><p data-start=\"441\" data-end=\"476\"><span style=\"color: #000000;\">A favorable economic environment.<\/span><\/p><\/li><li data-section-id=\"1v8f5mm\" data-start=\"477\" data-end=\"533\"><p data-start=\"479\" data-end=\"533\"><span style=\"color: #000000;\">And, most decisively, a highly competitive tax regime.<\/span><\/p><\/li><\/ul><p data-start=\"535\" data-end=\"803\"><span style=\"color: #000000;\">Indeed, Paraguay\u2019s tax system is the most competitive in the region, providing for a <strong data-start=\"620\" data-end=\"685\">maximum tax rate of 10% on the income of resident individuals<\/strong> and adopting a <strong data-start=\"701\" data-end=\"735\">territorial taxation principle<\/strong>, under which <strong data-start=\"749\" data-end=\"802\">foreign-source income is not taxed in the country<\/strong>.<\/span><\/p><p data-start=\"805\" data-end=\"998\"><span style=\"color: #000000;\">However, in practice, we have identified recurring misunderstandings regarding the true tax implications of transferring residency to Paraguay. Below, we briefly address the most common errors.<\/span><\/p><h3 data-section-id=\"1et1dfz\" data-start=\"1005\" data-end=\"1072\"><span style=\"color: #000000;\">First mistake: confusing immigration residency with tax residency<\/span><\/h3><p data-start=\"1074\" data-end=\"1174\"><span style=\"color: #000000;\">Although closely related, <strong data-start=\"1100\" data-end=\"1173\">immigration residency and tax residency are legally distinct concepts<\/strong>.<\/span><\/p><p data-start=\"1176\" data-end=\"1556\"><span style=\"color: #000000;\">Immigration residency is the authorization granted by the <strong data-start=\"1234\" data-end=\"1271\">National Directorate of Migration<\/strong> to reside in the country on an <strong data-start=\"1303\" data-end=\"1375\">occasional (90 days), temporary (2 years), or permanent (indefinite)<\/strong> basis. Tax residency, on the other hand, is a <strong data-start=\"1422\" data-end=\"1452\">purely tax-related concept<\/strong>, determining whether a person is subject to Paraguay\u2019s taxing authority based on domicile or residence.<\/span><\/p><p data-start=\"1558\" data-end=\"1867\"><span style=\"color: #000000;\">Immigration residency constitutes a <strong data-start=\"1594\" data-end=\"1639\">necessary but not sufficient prerequisite<\/strong> for acquiring tax residency. Additionally, it is essential to obtain a <strong data-start=\"1711\" data-end=\"1739\">Paraguayan identity card<\/strong> and, when applicable, proceed with registration in the <strong data-start=\"1795\" data-end=\"1866\">Single Taxpayer Registry (Registro \u00danico del Contribuyente \u2013 \u201cRUC\u201d)<\/strong>.<\/span><\/p><p data-start=\"1869\" data-end=\"2021\"><span style=\"color: #000000;\">It is also crucial to verify whether a <strong data-start=\"1908\" data-end=\"1943\">Double Taxation Agreement (DTA)<\/strong> exists between Paraguay and the country of origin, an aspect addressed later.<\/span><\/p><h3 data-section-id=\"1g44ec0\" data-start=\"2028\" data-end=\"2106\">Second mistake: believing that only permanent residents can be tax residents<\/h3><p data-start=\"2108\" data-end=\"2278\">Tax residency is regulated in <strong data-start=\"2138\" data-end=\"2161\">Decree No. 3,181\/19<\/strong>, which regulates the <strong data-start=\"2183\" data-end=\"2216\">Non-Resident Income Tax (INR)<\/strong> within the framework of <strong data-start=\"2241\" data-end=\"2277\">Law No. 6,380\/19 (the \u201cTax Law\u201d)<\/strong>.<\/p><p data-start=\"2280\" data-end=\"2482\">The confusion arises from the wording of <strong data-start=\"2321\" data-end=\"2348\">Article 2 of the decree<\/strong>, which states that an individual is considered a tax resident if they hold a <strong data-start=\"2426\" data-end=\"2456\">permanent residence permit<\/strong> under <strong data-start=\"2463\" data-end=\"2481\">Law No. 978\/96<\/strong>.<\/p><p data-start=\"2484\" data-end=\"2562\">However, this interpretation is currently incorrect for the following reasons:<\/p><ul data-start=\"2564\" data-end=\"3156\"><li data-section-id=\"1qjlel9\" data-start=\"2564\" data-end=\"2811\"><p data-start=\"2566\" data-end=\"2811\"><strong data-start=\"2566\" data-end=\"2617\">Law No. 978\/96 was repealed by Law No. 6,984\/22<\/strong>, which introduced the figure of the <strong data-start=\"2654\" data-end=\"2676\">temporary resident<\/strong>, allowing access to a Paraguayan identity card and, consequently, to registration in the <strong data-start=\"2766\" data-end=\"2773\">RUC<\/strong>, enabling taxation as a tax resident.<\/p><\/li><li data-section-id=\"17ajecs\" data-start=\"2812\" data-end=\"3000\"><p data-start=\"2814\" data-end=\"3000\">Consistent with this, the <strong data-start=\"2840\" data-end=\"2902\">National Directorate of Tax Revenues (the \u201cTax Authority\u201d)<\/strong> has established that <strong data-start=\"2924\" data-end=\"2999\">foreigners with temporary residency are eligible to register in the RUC<\/strong>.<\/p><\/li><li data-section-id=\"1asii7d\" data-start=\"3001\" data-end=\"3156\"><p data-start=\"3003\" data-end=\"3156\">The Tax Authority has also determined that the <strong data-start=\"3050\" data-end=\"3155\">Paraguayan identity card is the essential requirement for the issuance of a tax residency certificate<\/strong>.<\/p><\/li><\/ul><p data-start=\"3158\" data-end=\"3391\">Consequently, a foreigner holding a <strong data-start=\"3194\" data-end=\"3224\">temporary residence permit<\/strong>, by being able to obtain a <strong data-start=\"3252\" data-end=\"3290\">Paraguayan identity card and a RUC<\/strong>, may be considered a <strong data-start=\"3312\" data-end=\"3328\">tax resident<\/strong>, regardless of the current wording of <strong data-start=\"3367\" data-end=\"3390\">Decree No. 3,181\/19<\/strong>.<\/p><p data-start=\"3158\" data-end=\"3391\">\u00a0<\/p><h3 data-start=\"3158\" data-end=\"3391\">Third mistake: believing that Paraguayan tax residency automatically eliminates tax residency in another country<\/h3><p data-start=\"3514\" data-end=\"3660\">Paraguay currently has <strong data-start=\"3537\" data-end=\"3574\">Double Taxation Agreements (DTAs)<\/strong> in force with <strong data-start=\"3589\" data-end=\"3659\">Chile, Uruguay, Taiwan, Qatar, the United Arab Emirates, and Spain<\/strong>.<\/p><p data-start=\"3662\" data-end=\"3851\">A person may be considered a <strong data-start=\"3691\" data-end=\"3739\">tax resident in two countries simultaneously<\/strong>. In such cases, DTAs establish so-called <strong data-start=\"3781\" data-end=\"3804\">\u201ctie-breaker rules\u201d<\/strong>, which generally apply the following criteria:<\/p><ul data-start=\"3853\" data-end=\"4166\"><li data-section-id=\"18psu3r\" data-start=\"3853\" data-end=\"3989\"><p data-start=\"3855\" data-end=\"3989\">The place where the person has a <strong data-start=\"3888\" data-end=\"3916\">permanent home available<\/strong>, and failing that, the <strong data-start=\"3940\" data-end=\"3969\">center of vital interests<\/strong> (family, business).<\/p><\/li><li data-section-id=\"xxyi44\" data-start=\"3990\" data-end=\"4077\"><p data-start=\"3992\" data-end=\"4077\">The place of <strong data-start=\"4005\" data-end=\"4027\">habitual residence<\/strong>, and if dual residency persists, <strong data-start=\"4061\" data-end=\"4076\">nationality<\/strong>.<\/p><\/li><li data-section-id=\"4dc8jn\" data-start=\"4078\" data-end=\"4166\"><p data-start=\"4080\" data-end=\"4166\">As a last resort, the criterion determined <strong data-start=\"4123\" data-end=\"4165\">by mutual agreement between the states<\/strong>.<\/p><\/li><\/ul><p data-start=\"4168\" data-end=\"4419\">For example, if a <strong data-start=\"4186\" data-end=\"4240\">Spanish resident obtains tax residency in Paraguay<\/strong>, but maintains their <strong data-start=\"4262\" data-end=\"4301\">home, family, and business in Spain<\/strong>, and spends most of their time in Spanish territory, they will <strong data-start=\"4365\" data-end=\"4418\">continue to be considered a tax resident in Spain<\/strong>.<\/p><p data-start=\"4421\" data-end=\"4602\">In such a case, obtaining immigration residency in Paraguay would be <strong data-start=\"4490\" data-end=\"4535\">insufficient to access its tax advantages<\/strong> and could lead to <strong data-start=\"4554\" data-end=\"4601\">challenges from the Spanish tax authorities<\/strong>.<\/p><p data-start=\"4604\" data-end=\"5036\">In the absence of a DTA, the situation may be even more burdensome, since the taxpayer could be subject to <strong data-start=\"4711\" data-end=\"4799\">international double taxation without tie-breaker mechanisms or effective tax relief<\/strong>. Therefore, in addition to obtaining tax residency in Paraguay, it is essential to analyze the <strong data-start=\"4895\" data-end=\"4945\">conditions for terminating prior tax residency<\/strong>, whether based on the applicable DTA or the domestic legislation of the country of origin.<\/p><h3 data-section-id=\"1say326\" data-start=\"5043\" data-end=\"5118\">Fourth mistake: believing in the existence of a 120-day minimum stay rule<\/h3><p data-start=\"5120\" data-end=\"5241\">Current tax regulations <strong data-start=\"5144\" data-end=\"5199\">do not require a minimum annual stay in the country<\/strong> in order to be considered a tax resident.<\/p><p data-start=\"5243\" data-end=\"5456\">Formally, a person may obtain a <strong data-start=\"5275\" data-end=\"5304\">tax residency certificate<\/strong> even if their physical presence in Paraguay has been limited, provided that they comply with the corresponding <strong data-start=\"5416\" data-end=\"5455\">administrative and tax requirements<\/strong>.<\/p><p data-start=\"5458\" data-end=\"5606\">The confusion regarding a supposed <strong data-start=\"5493\" data-end=\"5511\">\u201c120-day rule\u201d<\/strong> stems from a misinterpretation of <strong data-start=\"5546\" data-end=\"5605\">Articles 151 and 152 of Law No. 125\/91 (the \u201cTax Code\u201d)<\/strong>.<\/p><p data-start=\"5608\" data-end=\"5891\">These provisions refer exclusively to the <strong data-start=\"5650\" data-end=\"5682\">tax domicile of the taxpayer<\/strong>, establishing that the declared domicile is valid for all legal purposes unless the <strong data-start=\"5767\" data-end=\"5784\">Tax Authority<\/strong> requires the establishment of a new one when the declared domicile hinders assessment or audit activities.<\/p><p data-start=\"5893\" data-end=\"6178\">In this context, if the taxpayer does not establish a new tax domicile, the <strong data-start=\"5969\" data-end=\"6024\">Tax Authority is empowered to assign one ex officio<\/strong>, and one of the criteria for doing so is the <strong data-start=\"6070\" data-end=\"6092\">place of residence<\/strong>, which is presumed when the person remains there for <strong data-start=\"6146\" data-end=\"6177\">more than 120 days per year<\/strong>.<\/p><p data-start=\"6180\" data-end=\"6538\">Therefore, the reference to <strong data-start=\"6208\" data-end=\"6252\">120 days does not regulate tax residency<\/strong>, but operates solely as a <strong data-start=\"6279\" data-end=\"6332\">subsidiary criterion for determining tax domicile<\/strong>. It is not a general rule for acquiring tax residency, but rather a <strong data-start=\"6401\" data-end=\"6425\">procedural provision<\/strong> designed to provide the Tax Authority with an operational tool in exercising its powers of assessment and audit.<\/p><h3 data-section-id=\"1qibwb7\" data-start=\"6545\" data-end=\"6649\">Fifth mistake: believing that RUC registration and invoice issuance are requirements for tax residency<\/h3><p data-start=\"6651\" data-end=\"6771\">Obtaining <strong data-start=\"6661\" data-end=\"6770\">tax residency does not, by itself, imply the obligation to register in the RUC or to issue legal invoices<\/strong>.<\/p><p data-start=\"6773\" data-end=\"6998\">Under <strong data-start=\"6779\" data-end=\"6825\">Law No. 1,352\/88 and its regulatory decree<\/strong>, registration in the <strong data-start=\"6847\" data-end=\"6854\">RUC<\/strong> is required only for <strong data-start=\"6876\" data-end=\"6918\">individuals subject to tax obligations<\/strong>, either as direct taxpayers or as withholding, collection, or reporting agents.<\/p><p data-start=\"7000\" data-end=\"7222\">Within this framework, individuals must register <strong data-start=\"7049\" data-end=\"7091\">only when they generate taxable events<\/strong> under the <strong data-start=\"7102\" data-end=\"7131\">Personal Income Tax (IRP)<\/strong> or the <strong data-start=\"7139\" data-end=\"7164\">Value Added Tax (VAT)<\/strong>, both of which operate under a <strong data-start=\"7196\" data-end=\"7221\">territorial principle<\/strong>.<\/p><p data-start=\"7224\" data-end=\"7545\">Consequently, a person who obtains <strong data-start=\"7259\" data-end=\"7364\">tax residency in Paraguay but does not generate income or conduct taxable transactions in the country<\/strong> \u2014 for example, someone who receives <strong data-start=\"7401\" data-end=\"7438\">exclusively foreign-source income<\/strong> \u2014 is <strong data-start=\"7444\" data-end=\"7501\">not required to register in the RUC or issue invoices<\/strong> in order to obtain or maintain that status.<\/p><h3 data-section-id=\"nqgzcm\" data-start=\"7552\" data-end=\"7565\">Conclusions<\/h3><p data-start=\"7567\" data-end=\"7665\">Transferring tax residency to Paraguay requires <strong data-start=\"7615\" data-end=\"7649\">careful legal and tax analysis<\/strong>. In particular:<\/p><ul data-start=\"7667\" data-end=\"8268\"><li data-section-id=\"u6qj23\" data-start=\"7667\" data-end=\"7765\"><p data-start=\"7669\" data-end=\"7765\">Immigration residency and tax residency are <strong data-start=\"7713\" data-end=\"7762\">different concepts and should not be confused<\/strong>.<\/p><\/li><li data-section-id=\"n9wgsn\" data-start=\"7766\" data-end=\"7836\"><p data-start=\"7768\" data-end=\"7836\"><strong data-start=\"7768\" data-end=\"7809\">Temporary residency may be sufficient<\/strong> to access tax residency.<\/p><\/li><li data-section-id=\"1v9c18o\" data-start=\"7837\" data-end=\"7998\"><p data-start=\"7839\" data-end=\"7998\">Obtaining tax residency in Paraguay <strong data-start=\"7875\" data-end=\"7944\">does not automatically eliminate tax residency in another country<\/strong>, especially where DTAs and tie-breaker rules apply.<\/p><\/li><li data-section-id=\"1ei340m\" data-start=\"7999\" data-end=\"8132\"><p data-start=\"8001\" data-end=\"8132\">The reference to <strong data-start=\"8018\" data-end=\"8072\">120 days is not a rule for acquiring tax residency<\/strong>, but a subsidiary criterion for determining tax domicile.<\/p><\/li><li data-section-id=\"1q0h9kq\" data-start=\"8133\" data-end=\"8268\"><p data-start=\"8135\" data-end=\"8268\"><strong data-start=\"8135\" data-end=\"8267\">Registration in the RUC and invoice issuance are required only when taxable territorial income or transactions exist in Paraguay<\/strong>.<\/p><\/li><\/ul><p data-start=\"8270\" data-end=\"8456\">Ultimately, <strong data-start=\"8282\" data-end=\"8350\">changing tax residency is not merely an administrative procedure<\/strong>, but a <strong data-start=\"8358\" data-end=\"8455\">strategic decision in international tax planning that requires rigorous professional analysis<\/strong>.<\/p><p data-start=\"8463\" data-end=\"8515\"><strong data-start=\"8463\" data-end=\"8494\">Federico Mart\u00ednez Tebecheri<\/strong><br data-start=\"8494\" data-end=\"8497\" \/>Associado S\u00eanior<\/p><p data-start=\"8517\" data-end=\"8549\"><a class=\"decorated-link cursor-pointer\" rel=\"noopener\" data-start=\"8517\" data-end=\"8547\">federicomartinez@mersanlaw.com<\/a><\/p><p data-start=\"8517\" data-end=\"8549\">\u00a0<\/p><p data-start=\"8556\" data-end=\"8576\"><strong data-start=\"8556\" data-end=\"8576\">Legal Disclaimer<\/strong><\/p><p data-start=\"8578\" data-end=\"9041\" data-is-last-node=\"\" data-is-only-node=\"\">The information contained in this article is provided <strong data-start=\"8632\" data-end=\"8683\">for informational and educational purposes only<\/strong> and does not constitute legal advice or replace consultation with a professional. Each situation is unique and requires individualized analysis considering the specific circumstances of the case and the applicable legislation. To obtain professional advice regarding your specific situation, we recommend consulting lawyers specialized in the relevant area.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>During 2025, 38,236 residency applications were filed in Paraguay, mainly from Brazilian citizens. This represents a 31.3% increase compared to 2024 and consolidates a 203.5% cumulative increase over the last decade. Why are so many foreigners seeking to relocate to Paraguay? This trend can be explained primarily by the convergence of three factors: A simple&#8230;<\/p>","protected":false},"author":3,"featured_media":8250,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_theme","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[543],"tags":[456,460,540],"class_list":["post-8578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-eng","tag-mersan-2-en","tag-paraguay-2-en","tag-residencia-fiscal"],"_links":{"self":[{"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/posts\/8578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/comments?post=8578"}],"version-history":[{"count":0,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/posts\/8578\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/media\/8250"}],"wp:attachment":[{"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/media?parent=8578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/categories?post=8578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mersanlaw.com\/pt\/wp-json\/wp\/v2\/tags?post=8578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}