Triple 10 tax scheme
Paraguay's "Triple 10": the tax scheme everyone is talking about
· By Rodrigo D. Ruiz-Diaz Perrier
If you have seen a video about Paraguay's "Triple 10 taxes" and are not sure whether it is marketing or reality, the answer is: it is real, it is in the law, and it explains much of the investor interest the country receives.
What is the 10-10-10 rule?
The term, popularised after a BBC report, summarises the three most relevant taxes in Paraguay's system, all set at a flat 10% rate: VAT, corporate income tax (IRE) and personal income tax (IRP). Law 6380 of 2019 restructured the tax system precisely around this logic of simplicity.
How is the 10% VAT calculated in Paraguay?
General VAT applies to most goods and services at 10%, with a reduced 5% rate for basic-basket products (essential food, medicines). Compared with Spanish VAT (21% general rate), the difference in final price is significant for anyone buying or producing in Paraguay.
The nuance almost no one explains: the IDU
What many viral videos leave out is that there is a fourth tax, the Dividends and Profits Tax (IDU), which levies an additional 8% to 15% when profits are distributed (higher if the recipient is resident in a low- or no-tax jurisdiction). The "Triple 10" is real, but it does not mean zero tax on distributed profits.
Compared with Spain and the region
According to analysis by conta.com.py, corporate tax in Paraguay can be 2.5 to 3.5 times lower than in Argentina, Brazil or Uruguay, even after adding the IDU. Against Spain's corporate tax (25% general rate) and personal income tax that can exceed 45%, the gap is even wider.
What to check before getting carried away by the headline
A low-tax scheme only benefits those who structure their activity correctly: an active RUC, formal compliance before the DNIT and, if it is also meant to apply to income of Spanish origin, a review of the double-taxation treaty (or its absence) between Spain and Paraguay. The "Triple 10" is an excellent starting point for comparison, not an automatic guarantee of tax savings without advice.
Frequently asked questions
Brief answers to help you make an initial decision.
How is the 10% VAT calculated in Paraguay?
A general 10% rate applies to most goods and services, with a reduced 5% rate for basic-basket products such as essential food and medicines.
How much tax do you pay in Paraguay?
The "Triple 10" scheme sets VAT, corporate tax and personal income tax at 10%, plus the dividend tax (IDU, 8%-15%) if profits are distributed.