What Are the VAT Rates in Paraguay?

When it comes to taxes in Paraguay, one of the most common questions is: What is the VAT rate?

Although many think it is always 10%, the reality is that there are different rates depending on the product or service.

📊 VAT Rates According to Law 6380/19

🔹 5% VAT applies in the following cases:

1. Residential leases for exclusive housing use, including usufruct.

2. Sale of real estate in general.

3. Basic family basket products: rice, noodles, vegetable oil, yerba mate, milk, eggs, flour, and iodized salt.

4. Agricultural, horticultural, and fruit products:

   
   

   • Agricultural: rice, corn, wheat, soy, tobacco, cotton, etc.

   • Horticultural: tomato, lettuce, potato, onion, carrot, spinach, etc.

   • Fruit: orange, lemon, mango, banana, grape, apple, etc.

   
   

5. Live cattle and primary by-products: meat, offal, wool, leather, bristles, bones, etc.

6. Medicines registered for human use with the Ministry of Health.

🔹 10% VAT

Applies to all other goods and services not included in the categories above.

💡 Conclusion

Paraguay’s VAT system is designed to favor basic and essential products with a reduced 5% rate, while 10% applies to the rest of goods and services.

Understanding these differences is important for anyone planning to live or invest in Paraguay.

👉 At Residir en Paraguay, we help you obtain your legal residency in Paraguay quickly and safely, so you can start enjoying the benefits of your new life without complications.