Paraguay VAT Calculator 2026
Last updated: January 2026
The Value Added Tax (IVA) in Paraguay for 2026 has two rates administered by the SET (Subsecretaría de Estado de Tributación): 10% general for most goods and services, and 5% reduced for basic necessities, medications, and agricultural products. Exempt items include education, health services, financial interest, and basic food products. To calculate IVA at the general rate, multiply by 0.10. If the price includes IVA, divide by 1.10. Paraguay uses guaraníes (₲) as its currency. Small businesses under the simplified regime (SIMPLE) pay a reduced tax instead of itemized IVA. The 10% general rate positions Paraguay as having one of the lowest standard VAT rates in South America.
FAQ
What is the IVA rate in Paraguay in 2026?
Paraguay has two IVA rates: 10% general for most goods and services, and 5% reduced for basic necessities, medications, interest on loans, and agricultural products. The 10% rate is one of the lowest in South America.
What products have the reduced 5% IVA in Paraguay?
The 5% reduced rate applies to: medications, basic food products (rice, noodles, cooking oil, yerba mate), agricultural products, interest on financial loans, and certain personal care items. The SET maintains the complete list of reduced-rate items.
How is IVA calculated on a price in Paraguay?
For the general rate: multiply by 0.10. On ₲1,000,000 the IVA is ₲100,000, total ₲1,100,000. For the reduced rate: multiply by 0.05. If the price includes 10% IVA, divide by 1.10 to get the pre-tax amount.
What products are exempt from IVA in Paraguay?
Exempt from IVA: educational services, health services, financial interest on savings, real estate transfers (first sale), exports (zero-rated), public services under certain thresholds, and unprocessed agricultural products sold directly by producers.
What is the SIMPLE regime in Paraguay?
The SIMPLE (Sistema de Impuesto a la Renta del Pequeño Contribuyente) applies to businesses with annual income up to ₲80,000,000. They pay a simplified 10% tax on net income instead of separate IVA and income tax declarations. This simplifies compliance for small businesses.