Welcome to Paraguay, a country known for its vibrant culture and warm hospitality! Whether you're a digital nomad, an expat, or a location-independent worker, establishing tax residency here can open doors to new opportunities. Let's walk you through the essential steps to obtain tax residency in Paraguay.
Step 1: Obtain a Residence Permit
First and foremost, you need to obtain a residence permit. This process involves submitting an application to the Immigration Department. You'll need to provide various documents, including a valid passport, birth certificate, proof of income, and a clean police record from your country of origin. Once your application is approved, you'll receive a temporary residence permit, which is typically valid for one year.
Step 2: Physical Presence Requirement
To qualify for tax residency, you must physically reside in Paraguay for at least 183 days within a calendar year. This period does not need to be consecutive, but it is essential to maintain a record of your stays in the country to meet this requirement.
Step 3: Register with the Tax Authorities
Once you meet the physical presence requirement, the next step is to register with the Paraguayan tax authorities. You will need to visit the local tax office (Subsecretaría de Estado de Tributación, SET) and submit the necessary forms along with your residence permit and identification documents. This registration process will assign you a Tax Identification Number (RUC).
Step 4: Open a Local Bank Account
Opening a local bank account is a crucial step in establishing your financial presence in Paraguay. Most banks will require your residence permit and Tax Identification Number (RUC) to open an account. This account will be essential for managing your finances while residing in the country.
Step 5: Maintain Compliance with Local Tax Laws
As a tax resident of Paraguay, you must comply with local tax regulations. This includes filing annual tax returns and paying any applicable taxes on your global income. Ensure you keep accurate records of your income and expenses to facilitate the tax filing process.
Legal References
- Ley Nº 978/96 de Migraciones
- Ley Nº 125/91, Código Tributario
- Decreto Nº 2051/19, Que Reglamenta la Ley N° 125/91
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