Paraguay Cross Border

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

The law is Ley N° 6380/2019 "De Modernización y Simplificación del Sistema Tributario Nacional": Libro I, Título IV (arts. 71 to 79) for the non-resident income tax (INR) and Título II (arts. 40 to 46) for the dividend tax (IDU), read in the text published by the Biblioteca y Archivo Central del Congreso Nacional (BACN). The INR regulation is the Anexo to Decreto N° 3181/2019, in force from 1 January 2020 (Decreto 3181 art. 3), read in the copy published by the Dirección Nacional de Ingresos Tributarios (DNIT). Its start date for card processors withholding INR on digital services was put back to 1 January 2021 by Decreto N° 3667/2020 (art. 2), so that rule is in force for 2026. The INR has no annual return of its own: it is withheld payment by payment and the tax withheld is final (art. 77). Amounts are in guaraníes (G).

Detail lives in the sibling skills. The resident company's own tax (IRE), its deduction caps for payments abroad and the Ley 125/1991 penalties are in paraguay-corporate-income-tax. A resident individual's tax (IRP) is in paraguay-income-tax. IVA on services bought from abroad, including the digital services perception, is in paraguay-iva. Related-party pricing is in paraguay-transfer-pricing.

Quick answer. A payment from Paraguay to a non-resident that is Paraguayan-source income bears INR at 15% of a presumed net income. The presumed share depends only on the type of payment: 30% (unrelated foreign bank interest, international freight, digital services, sale of movables), 30% (sale of real estate), 50% (rent of real estate), 70% (personal services) or 100% (payments to a shareholder, head office or related party except all preceding art. 75 categories, and other unlisted payments). That gives 4.5%, 7.5%, 10.5% or 15% of the gross. The Paraguayan payer withholds it and is jointly liable. Dividends and branch profits paid abroad bear IDU at 15% instead. The Spain treaty expressly covers INR and IDU. The table also records the text caps in the other five treaties; their application to the post-2019 taxes remains unconfirmed and must be established before using those caps.

Who this applies to

Residents and non-residents.

• Companies and other entities are resident if incorporated under Paraguayan law, or if foreign and they establish their domicile in Paraguay, from their registration in the Public Registry (Ley 6380 art. 5).
• Individuals are resident for tax purposes if they hold permanent residence in Paraguay under Decreto 3181 Anexo art. 2. That decree refers to the former Ley N° 978/1996; Ley N° 6984/2022 art. 107 repealed it. Check the permanent-residence document under the current migration law; the historical statutory reference does not establish that an old document is sufficient.
• INR taxpayers are individuals, companies and other entities resident, domiciled or incorporated abroad that are not resident and have no permanent domicile in Paraguay, when they earn Paraguayan-source income from the taxable events of Títulos I (IRE) and III (IRP) of Libro I. Acting through an agent, attorney or representative in Paraguay does not change this (arts. 71 and 72).
• A branch, agency or permanent establishment of a foreign person that carries on taxable activities in Paraguay is itself an IRE taxpayer (art. 2.7) and is taxed in paraguay-corporate-income-tax. What it remits to its head office bears IDU (arts. 40 and 43.2), not INR.

Who acts.

• The Paraguayan payer. Every IRE taxpayer listed in art. 2, including the State and the municipalities, withholds INR when it makes funds available, remits or pays income to a non-resident, and is jointly liable for the tax (art. 77).
• A resident individual in independent personal services withholds INR only when paying for services of a similar kind directly linked to the IRP-taxed income (art. 77, second paragraph; Decreto 3181 art. 9). Other resident individuals do not withhold.
• Special agents (Decreto 3181 art. 9): the notary on sales of real estate and registrable movables; the card processor or administrator on digital services; the Paraguayan company whose shares or quotas change hands between non-residents; the Paraguayan issuer of bonds placed abroad, on the interest; otherwise the notary, agent, attorney or representative who takes part in the operation.
• The company paying dividends withholds IDU from profits put at the disposal of its owners, resident or not (art. 41).

Out of scope. The IRE and IRP of residents, IVA, payroll and social security for workers posted to or from Paraguay, and the transfer pricing study. Free-zone users, maquila companies and projects under the investment incentive regime of Ley 7548/2025 have their own regimes: refer.

Rates, bands and thresholds

Tax year 2026 (calendar year). The INR rate is applied to the presumed net income, which is a fixed share of the gross amount excluding IVA where IVA applies (Decreto 3181 art. 10). The last column of the first table multiplies the two.

Item	Rate or amount	Year	Source
INR rate (Ley 6380 art. 76)	15% of the presumed net income	2026	https://www.bacn.gov.py/leyes-paraguayas/9332/ley-n-6380-de-modernizacion-y-simplificacion-del-sistema-tributario-nacional
Presumed net income 30% (art. 75.1): interest and commissions on loans from foreign public or private lenders and multilateral bodies, if lender and borrower are not related, including bonds placed abroad; international passenger transport and freight; container hire; performing arts; insurance and reinsurance premiums covering risks in Paraguay and abroad; telephone, audio and video transmission, internet data and other digital services supplied from abroad; sale of movables situated in Paraguay	30% of the gross, so 4.5% of the payment	2026	same
Presumed net income on sale of real estate in Paraguay (art. 75.2; Decreto 3181 art. 3)	30% of the sale price excluding IVA, so 4.5%; each instalment of a sale on credit is taxed as received	2026	same
Presumed net income on rent of real estate in Paraguay (art. 75.3)	50% of the rent, so 7.5%	2026	same
Presumed net income on personal services, professional or not (art. 75.4)	70% of the gross, so 10.5%	2026	same
Presumed net income on sale of shares or quotas of Paraguayan companies (art. 75.5; Decreto 3181 art. 5)	the lower of sale price less nominal value, and 30% of the sale price	2026	same
Presumed net income on any amount paid to partners, shareholders, head office or related companies or entities, except the items above (art. 75.6)	100%, so 15%	2026	same
Presumed net income on any other amount not listed (art. 75.7)	100%, so 15%	2026	same
Digital services from abroad (Decreto 3181 art. 7)	30% of the price excluding IVA, at 15%; withheld by the bank, card processor, exchange house or telephone company that handles the payment; digital services linked to imports of goods are not covered	2026	https://www.dnit.gov.py/documents/47797/47809/Decreto+N%C2%B0+3181-19.pdf/1382f732-af6b-de2a-0fe3-8ce02a0eb2ff
Insurance indemnities paid by Paraguayan companies to non-residents on risks in Paraguay (Decreto 3181 art. 6)	30% of the indemnity, at 15%	2026	same
Dividends remitted abroad that did not bear IDU (Decreto 3181 art. 8)	INR on 100% of the amount remitted, at 15%; not for maquila contract profits or free-zone users' profits	2026	same
IDU on profits, dividends or returns paid to a non-resident, including a foreign head office (Ley 6380 art. 43.2)	15%	2026	https://www.bacn.gov.py/leyes-paraguayas/9332/ley-n-6380-de-modernizacion-y-simplificacion-del-sistema-tributario-nacional
IDU on the same paid to a resident (art. 43.1)	8%	2026	same
IDU reduction for owners of qualifying agro-industrial companies: at least USD 5,000,000 over the last five fiscal years including the current year, invested in fixed assets for installation, expansion or renewal directly used in first-stage agricultural processing (for example flour, crude oils, expellers or pellets); retain investment evidence and accounting/tax records (art. 133)	rates of art. 43 reduced by 20% (15% becomes 12%; 8% becomes 6.4%)	2026	same
Presumed distribution: loans to an owner (art. 40.1)	every loan, unless the lender's business is financial intermediation and the loan is within 2% of its loan book	2026	same
Presumed distribution: cash shortfall (art. 40.2)	shortfall above 10% of the "caja" account in the financial statements	2026	same

Treaty text caps. The DNIT lists six double tax conventions in force, each approved by law. These are the rates in the treaty texts, subject to their tax coverage and other conditions; they are not a confirmed operational INR/IDU instruction for the five pre-2019 treaties. For a covered tax, the cap applies to the gross amount, where the beneficial owner is resident in the other state and the income is not effectively connected with a permanent establishment in Paraguay. Compare the cap with the domestic effective rate above: a cap of 10% does nothing for unrelated bank interest at 4.5%.

Treaty (law, in force from)	Dividends	Interest	Royalties	Source
Chile (Ley 2965/2006, 26 Aug 2008)	10% (art. 10.2)	10% on loans from banks and insurers; 15% otherwise (art. 11.2)	15% (art. 12.2)	https://www.bacn.gov.py/leyes-paraguayas/2049/ley-n-2965-aprueba-el-convenio-entre-la-republica-del-paraguay-y-la-republica-de-chile-para-evitar-la-doble-imposicion
Taiwan, Republic of China (Ley 3972/2010, 3 Jun 2010)	5% (art. 10.2 as amended by the 3 March 2008 exchange of notes)	10% (art. 11.2)	10% (art. 12.2)	https://www.bacn.gov.py/leyes-paraguayas/2912/ley-n-3972-aprueba-el-convenio-entre-la-republica-del-paraguay-y-la-republica-de-china-para-evitar-la-doble-imposicion
United Arab Emirates (Ley 6230/2018, 20 Jan 2019)	15% (art. 11.2)	6% on bank and insurance company loans; 15% otherwise (art. 12)	15% (art. 13.2)	https://www.bacn.gov.py/leyes-paraguayas/8743/ley-n-6230-aprueba-el-acuerdo-entre-paraguay-y-los-emiratos-arabes-unidos-para-evitar-la-doble-imposicion
Uruguay (Ley 6276/2019, 30 Mar 2019)	15% (art. 10.2); branch remittances 15% (art. 10.6)	15% (art. 11.2)	15% (art. 12.2); technical service fees 15% (art. 13 bis)	https://www.bacn.gov.py/leyes-paraguayas/8695/ley-n-6276-aprueba-el-convenio-entre-paraguay-y-uruguay-para-evitar-la-doble-imposicion
Qatar (Ley 6387/2019, 16 Mar 2020)	15% (art. 10.2)	6% on bank and insurance company loans; 15% otherwise (art. 11.2)	15% (art. 12.2)	https://www.bacn.gov.py/leyes-paraguayas/9349/ley-n-6387-aprueba-el-acuerdo-entre-paraguay-y-qatar-para-evitar-la-doble-imposicion
Spain (Ley 7271/2024, 14 Oct 2024; effective 1 Jan 2025)	5% to a company holding directly at least 50% of the capital for 365 days including the payment day; 0% to a pension fund; 10% otherwise (art. 10.2); branch remittances 5% (art. 10.6)	5% (art. 11.2); exempt at source for the listed cases, among them a financial institution, the State and credit sales of equipment or goods (art. 11.3)	5% (art. 12.2)	https://www.bacn.gov.py/leyes-paraguayas/12584/ley-n-7271-2024-que-aprueba-el-convenio-entre-paraguay-y-espana-para-evitar-la-doble-imposicion
DNIT treaty list (Spain date is the effective date, reconciled below with BOE)	six conventions, as above			https://www.dnit.gov.py/web/portal-institucional/cdi-%7C-convenios-de-doble-imposici%C3%B3n

The Spain dates differ in the official sources: the DNIT table shows 1 January 2025; the original BOE publication states entry into force on 14 October 2024, while art. 27 makes the tax provisions effective from 1 January 2025. These are entry and effect dates respectively, not competing entry dates.

Which Paraguayan taxes each treaty covers matters. The Spain convention names the IRP, IRE, IDU and INR (art. 2.3). The other five, signed before Ley 6380, name the earlier income taxes (IRACIS, IRAGRO, IRPC, IRP, or "el Impuesto a la Renta" in the Taiwan text) and extend to later taxes "of identical or substantially similar nature" (art. 2.4 in Chile, UAE, Uruguay and Qatar; art. 2.2 in Taiwan). Whether the DNIT treats the INR and the IDU as covered by those five is not confirmed: see the end of Sources.

The base

What is Paraguayan-source income of a non-resident (art. 73)

Income from activities carried out, property situated or rights used economically in Paraguay. In addition:

1. interest on loans or other investments by the head office or other branches abroad, and royalties and technical assistance paid by a Paraguayan branch, agency or establishment of a foreign person;
2. interest or commissions on financing or loans, where the issuer or lender is incorporated or resident abroad;
3. interest, commissions, returns or capital gains from securities of Paraguayan companies;
4. capital gains on the sale or rent of property situated in Paraguay, assignments of rights, and the sale of securities, shares and quotas of Paraguayan companies;
5. insurance and reinsurance covering risks in Paraguay or persons resident there when the contract is made;
6. the assignment of use of property and rights used in Paraguay, even partly;
7. derivatives where the investing or receiving entity is in Paraguay;
8. international transport of goods or persons between Paraguay and another country;
9. services rendered from abroad by individuals, professional or not, linked to IRE-taxed income;
10. services rendered in Paraguay, wholly or partly, by individuals, whatever their link to IRE income;
11. services by non-resident companies and entities, from abroad or in Paraguay, linked to IRE-taxed income;
12. digital services used in Paraguay, including entertainment and gambling, whoever supplies them. A service counts as used in Paraguay when any one of these is in Paraguay: the IP address of the device or the SIM country code; the customer's billing address; the bank account used to pay; the billing address the bank holds; or the issuer of the card used;
13. any other amount made available, remitted or paid from Paraguay abroad, except amounts linked to imports of goods.

Repairs of aircraft, ships and land vehicles carried out abroad are not Paraguayan-source income (art. 73, last paragraph).

When the tax arises (art. 74)

When the funds are made available, remitted or paid, whichever comes first. Set-off, novation, settlement and any other way of extinguishing the debt count as making funds available. For a sale of Paraguayan shares between non-residents the tax arises on the date of the operation or contract (art. 77, third paragraph).

How the withholding is computed

1. Classify the payment under art. 75 and take the presumed net income share.
2. The base is the gross amount, excluding IVA where the operation is subject to IVA (Decreto 3181 art. 10).
3. Apply 15% (art. 76). The INR itself is not deductible in computing the withholding (art. 77).
4. Gross-up. The withholding may not be less than the rate applied to what the recipient actually received plus the withholding (Decreto 3181 art. 10, second paragraph). If the contract says the non-resident receives a net amount and the payer bears the tax, the base grows until the withholding equals the rate on the grossed-up amount.
5. Apply a treaty cap where one applies (see the treaty table and the facts to ask).
6. Issue the withholding voucher (comprobante de retención) through the DNIT's Tesakã software or other enabled means (Resolución General 33/2020 art. 3). It carries the non-resident's name, foreign identity or tax number, country of residence, concept, date the tax arose, net income, rate and tax (Decreto 3181 art. 11).

The INR withheld is the non-resident's final tax: it files no Paraguayan return for it (art. 77, last paragraph).

Boundary and exception table

Situation	Treatment	Source
Interest on Paraguayan public debt (Ministry of Finance and municipalities), and gains on holding or transferring it	Exempt from INR	Ley 6380 art. 79.1
Pay of diplomats, consular agents and official representatives of foreign states or international bodies accredited in Paraguay	Exempt, on reciprocity	art. 79.2
International freight for exports of goods, by a foreign carrier that issues the international transport document (road waybill, bill of lading, air waybill)	Exempt; the payer still reports the payment with tax zero	art. 79.3; Decreto 3181 art. 12
Interest, returns and gains on securities traded on stock exchanges regulated by the Comisión Nacional de Valores, including bonds of authorised issuers	Exempt; the payer reports with tax zero	art. 79.4; Decreto 3181 art. 12
Returns on Fondos Patrimoniales de Inversión (Ley 5452/2015)	Exempt; the payer reports with tax zero	art. 79.5; Decreto 3181 art. 12
Payment for imports of goods	Not INR income	art. 73.13
Repairs of aircraft, ships and land vehicles abroad	Not Paraguayan-source	art. 73, last paragraph
Dividends from a Paraguayan company to a non-resident	IDU at 15% withheld by the company, not INR; INR at 15% on 100% only if what is remitted did not bear IDU	arts. 40 to 43; Decreto 3181 art. 8
Profits of maquila companies, cooperatives and mutuals distributed to owners	Not subject to IDU	art. 40, last paragraph
Profits of maquila contracts and of free-zone users remitted abroad	Not subject to INR	Decreto 3181 art. 8
Profits allocated to the legal reserve, voluntary reserves or capitalisation	No IDU until capital is redeemed; a capitalisation decided by the shareholders' meeting must be formalised within 12 months	arts. 42 and 44
Payment to a related party abroad (except every preceding category in art. 75.1 to 75.5)	100% presumed net income, 15%; transfer pricing also applies	art. 75.6; paraguay-transfer-pricing
Expenses abroad of the Paraguayan payer on which INR was not withheld	Necessary expenses abroad are limited to 1% of gross income unless the provider is subject to INR and withholding is made, in which case the expense is fully deductible under this rule	art. 15.18; paraguay-corporate-income-tax
Real estate or registrable movable sold by a non-resident	The notary withholds INR on 30% of the price. The separate art. 137 Public Registry proof-of-payment gate applies to real estate deeds	Decreto 3181 arts. 3, 4 and 9; Ley 6380 art. 137

Dividends and branch profits paid abroad (IDU)

• Taxable event. Profits, dividends or returns made available or paid to the owner, partners or shareholders of Paraguayan sole-owner businesses, S.A., S.R.L. and similar companies, and by permanent establishments of foreign entities, bear IDU (art. 40). A distribution is any sharing of profit in cash or in kind, except shares or quotas issued by capitalising profit. Distribution of excess legal reserve, voluntary reserves or capital from capitalised profits also counts, taking reserves first, then undistributed profits, then contributed capital (art. 40).
• Presumed distributions (art. 40): loans to owners (with the 2% exception for financial lenders), a cash shortfall above 10% of the cash account, and any withdrawal of funds or private use of company goods or services without consideration, including paying owners' or their families' personal expenses.
• Base. The net profits, dividends or returns made available or paid (art. 42).
• Rate. 15% for a non-resident recipient, including a foreign head office (art. 43.2). Reduced by 20% under art. 133 for qualifying agro-industrial investment.
• Final tax. For a non-resident the IDU is a single and final payment (art. 41, last paragraph).
• When it arises (art. 44): for an S.A. and other entities that hold shareholders' meetings, when the meeting decides the distribution, whenever it is paid; for an S.R.L. and others without a meeting, on the date in the by-laws, otherwise in the fourth month after year-end; for capital redemption, when the meeting or competent body decides it; for a sole-owner business, in the fourth month after year-end unless the profit was reinvested in the business.

Deadlines and filing

Portal: the DNIT's Sistema Marangatu, logged in with the Clave de Acceso Confidencial de Usuario.

1. Register the obligation. A payer that withholds INR or IDU needs the obligation in its RUC: 725 for withholdings of income taxes (IRE, IRP, INR) and 726 for IDU withholding (DNIT INR page; DNIT IDU page). The DNIT page points non-resident digital suppliers to RG 114/2022; its registration/payment procedure is not established here because that resolution has not been read.
2. Withhold and issue the voucher at the moment the tax arises (art. 74), through Tesakã (RG 33/2020 art. 3) or, for IDU, the virtual IDU withholding voucher in Marangatu (RG 31/2019).
3. INR, monthly (Form 525, obligation 725). The DNIT puts a pro-forma settlement of last month's withholdings in Marangatu. The withholding agent checks and confirms it within the first six calendar days of the month through "Formulario N° 525 Liquidación de Retenciones de los Impuestos a las Rentas Versión 1" (RG 33/2020 art. 3). If it does not confirm, the DNIT treats it as accepted and books it to the agent's current account as a final balance. Payment is due by the 7th of each month, electronically or with a payment slip from Marangatu; a non-working day moves it to the next working day (DNIT INR guide, V 09/24).
4. IDU, monthly (Form 526). The DNIT puts a pro-forma IDU settlement at the agent's disposal; the agent checks and confirms it within the first 12 calendar days of the month. The fiscal period is the month and year in which the tax arose, as shown on the voucher. Without confirmation it is treated as accepted, and the amount is paid by the 13th of each month, by electronic payment only; if the 13th is not a working day, the deadline moves to the next working day (RG 31/2019 arts. 8, 9 and 11).
5. IDU informative return (obligation 954). The company files the annual IDU informative return within the sixth month after year-end on the informative-returns calendar (DNIT IDU guide). The notes on profits and reserves required from years closed 31 December 2025 are in paraguay-corporate-income-tax.
6. Exempt payments. A payer of income exempt under art. 79.3, 79.4 or 79.5 reports the payment through the same voucher with the full amount as net income and a rate of zero (Decreto 3181 art. 12).
7. After filing. Keep the Marangatu acknowledgement and the vouchers; give the non-resident its voucher, which is its proof of the final tax.

Penalties and interest

• Joint liability. The withholding agent answers jointly with the non-resident for the INR (art. 77) and the company for the IDU (art. 41). Tax not withheld is collected from the payer.
• Late payment, late filing, underpayment and fraud follow Ley N° 125/1991 (mora, contravención, omisión de pago, defraudación). The rates and the presumption of fraud for a withholding agent that pays over withheld tax late are set out once, in paraguay-corporate-income-tax.
• Foreign-expense deduction cap. Necessary expenses abroad are limited to 1% of gross income unless the provider is subject to INR and withholding is made; with that condition met, art. 15.18 permits full deduction under this rule. This is a cap, not automatic denial of the entire expense, and does not remove withholding-agent liability.
• Real estate. Without proof of INR paid the Public Registry does not register the deed (art. 137).

Cross-border points

• Treaty relief at source. Where a treaty applies, the cap in the treaty table limits Paraguay's tax on the gross amount. First establish that the tax and payment are covered, confirm beneficial ownership and check any permanent-establishment connection. RG 65/2020 arts. 7 and 8 require the local payer to obtain the foreign tax authority's residence certificate, containing its issue date, beneficiary name and identification number, and a declaration of treaty residence. It is valid for the foreign authority's stated term, or one year from issue if none is stated. Keep it for the limitation period. If it is not in Spanish, attach a translation by a Paraguayan registered public translator; a competent translator is permitted where no registered translator exists for that language. Keep the translation for the same period. A separate prior-registration or refund procedure remains unconfirmed.
• Residents earning abroad. A resident company's foreign-source income and its foreign tax credit (art. 6 last paragraph and art. 134, which also applies to income under the treaties in force) are in paraguay-corporate-income-tax. A resident individual's foreign services income is in paraguay-income-tax.
• IVA. Services from abroad used in Paraguay carry IVA as well as INR. The IVA rules, including the 10% digital services perception, are in paraguay-iva.
• Transfer pricing. Payments to related parties abroad, and to residents of low or nil tax jurisdictions, must also meet the arm's length rules in paraguay-transfer-pricing.
• Employees. Pay to a non-resident for work done in Paraguay is personal services income (art. 73.10, 70% presumed net income). Treaty employment articles (for example Uruguay art. 14, with its 183-day test) can move the right to tax. Social security for posted workers is not in this skill.

Two worked examples that recompute

Example 1: a Paraguayan S.A. pays three foreign suppliers in March 2026

Alfa S.A. (IRE General) pays, in March 2026, to recipients resident in a state with no Paraguayan treaty:

• G 200,000,000 to a foreign consulting company for management advice linked to its IRE income (art. 73.11). The consulting company is not related. This is not one of the 30% items, so the presumed net income is 100% (art. 75.7): INR G 30,000,000.
• G 80,000,000 to a foreign individual engineer for services (art. 73.9). Personal services: 70% (art. 75.4) = G 56,000,000, at 15% = G 8,400,000.
• G 500,000,000 of interest to an unrelated foreign bank (art. 73.2). 30% (art. 75.1.a) = G 150,000,000, at 15% = G 22,500,000.

Total INR G 60,900,000, confirmed on Form 525 within the first six days of April 2026 and paid by 7 April 2026.

Edge case, gross-up. The consulting contract instead says the company receives G 200,000,000 net and Alfa bears the tax. The withholding must equal 15% of the amount received plus the withholding (Decreto 3181 art. 10): W = 15% x (200,000,000 + W), so W = 200,000,000 x 15 / 85 = G 35,294,118 (rounded), on a grossed-up base of G 235,294,118.

name: PY INR on three payments abroad, with gross-up (March 2026)
inputs:
  consulting_fee: 200000000
  engineer_fee: 80000000
  bank_interest: 500000000
  inr_rate: 0.15
steps:
  - inr_consulting: consulting_fee * 1.00 * inr_rate
  - inr_engineer: engineer_fee * 0.70 * inr_rate
  - inr_interest: bank_interest * 0.30 * inr_rate
  - inr_total: inr_consulting + inr_engineer + inr_interest
  - inr_grossed_up: round(consulting_fee * inr_rate / (1 - inr_rate), 0)
  - grossed_up_base: consulting_fee + inr_grossed_up
expected:
  inr_consulting: 30000000
  inr_engineer: 8400000
  inr_interest: 22500000
  inr_total: 60900000
  inr_grossed_up: 35294118
  grossed_up_base: 235294118

Example 2: decision, distribute 2026 profit to a foreign parent or capitalise it

This is an illustration assuming the law and Spain treaty read on 11 November 2026 remain unchanged at the April 2027 distribution. Recheck the actual law and treaty conditions before that future decision; these are not verified 2027 liabilities.

Beta S.A. has 2026 profit after IRE of G 1,000,000,000. Its sole shareholder is a Spanish company that has held 100% of Beta directly for several years. The shareholders' meeting in April 2027 decides between:

• Distribute. IDU arises when the meeting decides the distribution (art. 44). The domestic rate is 15% (art. 43.2): G 150,000,000. The Spain convention covers the IDU (art. 2.3) and caps tax on dividends to a company holding at least 50% for 365 days at 5% (art. 10.2.a): G 50,000,000, if the treaty rate is applied. The parent receives G 950,000,000. If the shareholder were resident in a non-treaty state the tax would stay at G 150,000,000 and it would receive G 850,000,000.
• Capitalise. Profit taken to capital bears no IDU now (art. 42), provided the capital increase is formalised within 12 months of the meeting (art. 44). IDU comes back when that capital is redeemed, and the redemption is treated as coming from capitalised reserves and profits first (art. 40).

The figure that decides is the IDU paid now: G 50,000,000 (Spain, 5%) or G 150,000,000 (no treaty) against zero now if capitalised. The treaty saving is G 100,000,000. If the group needs the cash in Spain, distribution under the treaty costs 5%; if not, capitalising defers the tax but does not remove it. Do not lend the cash to the parent instead: a loan to a shareholder is a presumed distribution (art. 40.1).

name: PY IDU on 2026 profit to a Spanish parent, treaty against no treaty
inputs:
  profit: 1000000000
  idu_domestic_rate: 0.15
  spain_cap_rate: 0.05
steps:
  - idu_no_treaty: profit * idu_domestic_rate
  - idu_spain: profit * spain_cap_rate
  - net_no_treaty: profit - idu_no_treaty
  - net_spain: profit - idu_spain
  - treaty_saving: idu_no_treaty - idu_spain
  - idu_if_capitalised_now: profit * 0
expected:
  idu_no_treaty: 150000000
  idu_spain: 50000000
  net_no_treaty: 850000000
  net_spain: 950000000
  treaty_saving: 100000000
  idu_if_capitalised_now: 0

Ask the client first

1. Is the recipient a non-resident (for an individual, does it hold Paraguayan permanent residence; for an entity, is it incorporated or registered in Paraguay)? Does it have a branch or permanent establishment in Paraguay?
2. What exactly is the payment for (service in Paraguay or from abroad, interest, royalty, rent, sale of real estate or shares, dividend, digital service), and when are the funds made available, remitted or paid?
3. Is the recipient related to the payer (shareholder, head office, group company), and does the contract make the payer bear the tax?
4. Where is the recipient resident, is it one of the six treaty states, and do you hold its residence certificate and evidence that it is the beneficial owner?
5. For dividends: the shareholder's residence and holding period, and whether the profit will be distributed, reserved or capitalised.
6. Is the payer a free-zone user, a maquila company or under a special investment regime?

Sources

Source	URL	Read on
Ley N° 6380/2019, BACN text: arts. 2, 5 and 6 (taxpayers, residence, source), arts. 40 to 46 (IDU), arts. 71 to 79 (INR), arts. 133, 134 and 137	https://www.bacn.gov.py/leyes-paraguayas/9332/ley-n-6380-de-modernizacion-y-simplificacion-del-sistema-tributario-nacional	2026-11-11
Decreto N° 3181/2019, Anexo arts. 1 to 14 (INR regulation), DNIT copy	https://www.dnit.gov.py/documents/47797/47809/Decreto+N%C2%B0+3181-19.pdf/1382f732-af6b-de2a-0fe3-8ce02a0eb2ff	2026-11-11
Decreto N° 3667/2020, arts. 1 to 3 (start of digital services withholding moved to 1 Jan 2021), DNIT copy	https://www.dnit.gov.py/documents/47797/47809/Decreto+N%C2%B0+3667-2020.pdf/ce4d50d5-5a3d-34a5-dec0-2e3840aec5de	2026-11-11
Resolución General N° 33/2020, arts. 2 and 3 (Form 525, obligation 725, Tesakã vouchers)	https://www.dnit.gov.py/documents/20123/199761/RESOLUCION+GENERAL+N%C2%B0+33_2020.pdf/4a3dcac5-14e7-f4a5-22ce-fb4db0337def	2026-11-11
Resolución General N° 31/2019, arts. 8 to 11 (IDU pro-forma settlement, 12 days, payment by the 13th, Form 526)	https://www.dnit.gov.py/documents/20123/219558/RESOLUCION+GENERAL+N%C2%B0+31_2019_IDU.pdf/daeed623-e945-b006-ad5b-426d188e5549	2026-11-11
DNIT, INR page (rate, obligation 725, RG 114/2022 registration of non-resident digital suppliers)	https://www.dnit.gov.py/web/portal-institucional/inr	2026-11-11
DNIT, INR guide V 09/24 (payment by the 7th, six-day confirmation, notary withholding), read in full	https://www.dnit.gov.py/documents/20123/218215/Cartilla+INR+23.09.2024.pdf/9715bb1b-7568-ae98-b3b2-4a72f521aae7	2026-11-11
DNIT, IDU page (rates, obligation 726)	https://www.dnit.gov.py/web/portal-institucional/idu	2026-11-11
DNIT, IDU guide 03.09.24 (Form 526, payment by the 13th, informative return in the sixth month), read in full	https://www.dnit.gov.py/documents/20123/302950/IDU+Cartilla+Informativa+03.09.24.pdf/25eeb741-b627-f2f0-f798-a9188a1a0f26	2026-11-11
DNIT, double tax conventions in force (six, with laws and entry-into-force dates)	https://www.dnit.gov.py/web/portal-institucional/cdi-%7C-convenios-de-doble-imposici%C3%B3n	2026-11-11
Ley N° 2965/2006, Paraguay-Chile convention, BACN text, arts. 2, 10, 11 and 12	https://www.bacn.gov.py/leyes-paraguayas/2049/ley-n-2965-aprueba-el-convenio-entre-la-republica-del-paraguay-y-la-republica-de-chile-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 3972/2010, Paraguay-Republic of China (Taiwan) convention, BACN text, arts. 2, 10, 11 and 12	https://www.bacn.gov.py/leyes-paraguayas/2912/ley-n-3972-aprueba-el-convenio-entre-la-republica-del-paraguay-y-la-republica-de-china-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 6230/2018, Paraguay-UAE agreement, BACN text, arts. 2, 11, 12 and 13	https://www.bacn.gov.py/leyes-paraguayas/8743/ley-n-6230-aprueba-el-acuerdo-entre-paraguay-y-los-emiratos-arabes-unidos-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 6276/2019, Paraguay-Uruguay convention, BACN text, arts. 2, 10, 11, 12, 13 bis and 14	https://www.bacn.gov.py/leyes-paraguayas/8695/ley-n-6276-aprueba-el-convenio-entre-paraguay-y-uruguay-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 6387/2019, Paraguay-Qatar agreement, BACN text, arts. 2, 10, 11 and 12	https://www.bacn.gov.py/leyes-paraguayas/9349/ley-n-6387-aprueba-el-acuerdo-entre-paraguay-y-qatar-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 7271/2024, Paraguay-Spain convention, BACN text, arts. 2, 10, 11 and 12	https://www.bacn.gov.py/leyes-paraguayas/12584/ley-n-7271-2024-que-aprueba-el-convenio-entre-paraguay-y-espana-para-evitar-la-doble-imposicion	2026-11-11
Ley N° 6984/2022 art. 107, repeal of Ley 978/1996	https://www.bacn.gov.py/leyes-paraguayas/10973/ley-n-6984-de-migraciones-1	2026-11-11
Spain convention, original BOE publication, entry into force and art. 27 effects	https://www.boe.es/boe/dias/2024/07/29/pdfs/BOE-A-2024-15573.pdf	2026-11-11
RG 65/2020 arts. 7 and 8, foreign residence certificate and translation	https://www.dnit.gov.py/documents/20123/202522/Resoluci%C3%B3n%2BGeneral%2BN%C2%B065-2020.pdf/e5fb7814-34fc-4744-96c8-d99aee6d9d54?t=1684165234838.pdf	2026-11-11

Not yet confirmed: any separate DNIT form or prior registration required beyond the residence-certificate procedure in RG 65/2020 arts. 7 and 8, and any refund route after domestic withholding; whether the DNIT treats the INR and the IDU as taxes covered by the five conventions signed before Ley 6380 (Chile, Taiwan, UAE, Uruguay, Qatar), whose art. 2 names the earlier income taxes; the treaty articles other than dividends, interest, royalties and Uruguay's technical fees (permanent establishment, business profits, capital gains, employment, other income), not set out here; any further protocol or most-favoured-nation change beyond the Taiwan exchange of notes checked here; the detailed documentary interaction of current Ley 6984/2022 with Decreto 3181 art. 2; Resolución General 114/2022 (registration and payment by non-resident digital suppliers) and Resoluciones Generales 38/2020 and 42/2020 (notary withholding), named on the DNIT pages but not read; any decree after Decreto 3667/2020 amending Decreto 3181.