Uruguay vs Paraguay taxes (2026): income, company tax and VAT

Uruguay vs Paraguay tax rates at a glance

Tax	🇺🇾 Uruguay	🇵🇾 Paraguay
Income tax	Resident PIT: 10% - 36% Non-resident tax: 12% Foreign capital income: 12% Employment withholding: Monthly	Personal service income: 10% Capital income and gains: 8% Capital gains tax: 8% Foreign-source income: 0% generally Employee social security: 9% / 11% Employer social security: 16.5% / 17%
Corporate tax	Corporate income tax: 25% Domestic minimum top-up tax: 15% Company wealth tax: 1.5% LNTJ wealth tax: 3%	Corporate income tax: 10% Foreign-source income: 0% generally Dividend distribution tax: 8% / 15% VAT: 10%
Capital gains tax	Individual capital gains: 12% Effective title transfer: 2.4% LNTJ transfer rate: 7.5% Corporate capital gains: 25%	Capital gains tax: 8% Corporate capital gains: 10% Share gains: 8% Property gains: 8%
Dividend tax	Dividend withholding tax: 7% Resident dividend tax: 0% / 12% Foreign dividend WHT: 7% Deferred earnings: 7%	Dividend withholding tax: 8% / 15% Domestic dividend tax: 8% / 15% Foreign dividend tax: Case by case
Wealth tax	Individual wealth tax: 0.1% Non-resident scale: 0.7% - 1.5% Company wealth tax: 1.5% LNTJ company rate: 3%	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0%
Inheritance / estate tax	Inheritance tax: 0% Gift tax: 0% Estate tax: 0%	Inheritance tax: 0% Estate tax: 0% Gift tax: 0% Probate tax: 0%
VAT / GST / sales tax	VAT: 22%	VAT: 10%
Standard VAT	22%	10%
Standard corporate headline	25%	10%

Who wins on each tax

Personal income taxParaguay

Paraguay's personal tax burden is generally lower than Uruguay's progressive IRPF scale.

Corporate taxParaguay

Paraguay's 10% corporate tax is far below Uruguay's 25% corporate income tax.

Capital gains taxParaguay

Paraguay is usually lower for ordinary taxable gains, while Uruguay commonly taxes capital income at 12%.

VATParaguay

Paraguay's 10% VAT is below Uruguay's 22% standard VAT.

Stability & residence qualityUruguay

Uruguay is stronger for rule-of-law perception, banking reputation and family residence planning.

The verdict

Paraguay is the lower-tax answer for most ordinary profiles. Personal income tax is low, corporate tax is 10%, VAT is 10%, and the system is simpler if the business and income are local.

Uruguay is more expensive but more institutional. It has a higher corporate tax rate, higher VAT and progressive personal income tax, but it also offers stronger banking reputation, legal stability and an attractive residence story for families who can use its limited new-resident foreign movable- capital-income election and navigate the expanded 2026 foreign-income rules.

Choose Paraguay when rates are the deciding factor. Choose Uruguay when you are buying stability, residence quality, banking credibility and a more developed personal base.

How to read this comparison

Uruguay and Paraguay are both serious South American options, but they solve different problems. Paraguay is the low-rate choice; Uruguay is the higher-trust residence and wealth-planning choice.

Which one fits you

🇺🇾 Choose Uruguay if you're a…

Families prioritising stability and quality of life
Investors who value banking reputation
New residents who qualify for Uruguay's limited foreign movable-capital-income election

🇵🇾 Choose Paraguay if you're a…

Founders prioritising low corporate tax
Residents who want simple low headline rates
Local operators comparing VAT and company tax

Frequently asked questions

Is Uruguay or Paraguay better for tax?

Paraguay is usually better on headline tax rates. Uruguay is usually better for stability, banking reputation and family residence quality, but it has higher income, corporate and VAT rates.

What is Paraguay's corporate tax rate?

Paraguay's standard corporate income tax rate is generally 10%, with separate dividend and withholding rules depending on the payment and recipient.

Does Uruguay tax foreign income?

Uruguay taxes additional foreign movable and immovable capital income and gains under rules effective from 2026. A qualifying new resident may elect a limited regime for certain foreign movable-capital income, but that is not a blanket foreign-income exemption.