• The incorporation free of charge to the patrimony of the taxpayer of movable and immovable assets located in Paraguay or rights that must be complied with or exercised in the country.
• The total or partial redemption of shares or quotas of entities resident or incorporated in the country, on the portion exceeding the capital contributed, as well as reserves, whatever their denomination, excluding income taxed by IDU.
• Any unjustified increase in capital (a capital increase with no verifiable source).
Income derived from the provision of independent personal services and in a labor relationship. Income derived from the rendering of personal services of Paraguayan origin is deemed to be income that comes from personal work, professional or otherwise, performed by a resident in a relationship of dependence or not, consisting of any type of consideration, remuneration or income, whatever its denomination or nature. This includes income from the following:
• Remuneration originating from the provision of independent personal services.
• Salaries, wages, bonuses or per diems not subject to accountability and other remunerations in any concept, paid by individuals, public or private entities, binational entities and autonomous patrimonies, to their representatives, officials or employees in Paraguay or in other countries.
• The salaries, wages, bonuses and other remunerations of crew members of air, river or sea vessels and land vehicles, provided that such vessels or vehicles have their base port in Paraguay or are registered or recorded in the country, regardless of the nationality or domicile of the beneficiaries of the income and the countries between which the traffic takes place.
• Remunerations, salaries, commissions, per diems not subject to accounting, representation expenses, gratuities or remunerations paid or accredited by entities with or without legal personality resident in the country to members of their boards of directors and other management or advisory bodies.
• Income corresponding to retirement incentive schemes established for public officials.
• Any other remuneration received in money or in kind, in consideration of an independent personal service and in a relationship of dependence under the Labor Code.
Every individual is liable for tax on income derived from personal services, once the total gross income taxed under that heading, computed as from 1 January of that year, exceeds PYG80 million. The person who reaches this amount settles this tax on the total gross income received minus deductible expenses incurred in the first fiscal year following the day on which the amount is reached.
Exempt income. Income derived from the following activities is exempt:
• Interest on public debt securities issued by the state through the Ministry of Finance and by municipalities.
• Income and capital gains derived from the sale of property by expropriation.
• Income and capital gains from the sale or disposal of movable property, provided that the sum of these in the year does not exceed PYG20 million.
Temporary residence permits allow their holders to reside in Paraguay. They are valid for two years and may be renewed for the same time period. The following documents are required:
• Identity card or passport from the country of origin
• Birth certificate
• Marriage certificate or divorce decree (to demonstrate civil status)
• Police or criminal records (from the age of 14) from the country of origin or residence during the previous five years
• Police records certificate for foreigners issued by the Department of Informatics of the National Police (from the age of 14)
• Certificate of entrance in Paraguay (entry ticket or country entry stamp)
• Consular visa for countries that require it (verified by the Paraguayan Ministry of Foreign Affairs)
• Two passport-size photos (2.5 centimeters by 2.5 centimeters) in color
• Signed affidavit to obey Paraguayan laws, signed before the migration authority
• Signed affidavit regarding the economic activity to be performed in the country, signed before the migration authority
An individual with temporary residence must renew his or her permit every two years or apply for permanent residence. This residence allows foreigners to apply for a Paraguayan Identity Card for two years.
To obtain permanent residence, foreigners must hold the temporary resident status for two years. The following additional items are required:
• Paraguayan Identity Card
• Temporary Residence Card
• Certificate of Good Conduct, issued by the Identification Department of the National Police (from the age of 14)
• Certificate of Life and Residence, issued by the Jurisdictional Police Station
• Judicial records issued by the Supreme Court
• Proof of economic solvency
A permanent residence card is valid for 10 years and is renewable for the same period indefinitely. Foreigners with permanent residence must obtain a Paraguayan Identity Card, which must be renewed every 10 years. Investors who meet the conditions established by the regulations in force will be exempt from complying with the two-year period as temporary residents.
All original documents must be valid and also filed with two complete copies authenticated by a notary public. The documents in foreign languages (except Portuguese) must be translated into Spanish (including the passport) by a translator certified by the Paraguayan Supreme Court of Justice. Documentation from the country of origin or residence must be endorsed by the Paraguayan consulate abroad and legalized by the Ministry of Foreign Affairs in Asunción or apostilled
F. Work permits
Spontaneous, temporary and permanent residents do not need to obtain a work permit in Paraguay. The residence permit is sufficient for performing gainful activities in the country.
G. Family and personal considerations
Family members. Family members of a working expatriate must have separate permits to reside in Paraguay. However, the family members may file jointly with the working expatriate for residence permits. The dependents of a working expatriate may attend schools in Paraguay without student visas.
Driver’s licenses. International driver’s licenses are permitted in Paraguay.