Uruguay vs Paraguay
Tax Rate Comparison
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🇺🇾 Uruguay — Departmental & Municipal Taxes
Uruguay's 19 departments (like Montevideo, Maldonado) each have their own departmental government (Intendencia) that levies property taxes (Contribución Inmobiliaria) at rates set per department, vehicle patents (Patente de Rodados), and commercial licence fees. Montevideo has higher rates than interior departments. National income tax (IRPF) and corporate tax are nationally administered by the DGI (Dirección General Impositiva). Uruguay's territorial income tax system (prior to 2007 reform) was replaced with a worldwide system.
🇵🇾 Paraguay — Municipal & Departmental Taxes
Paraguay's 17 departments and 254 municipalities levy the Impuesto Inmobiliario (property tax at 1% of assessed value), commercial licence fees (patente comercial), and vehicle registration fees. Asunción has the highest commercial licence fees. The Subsecretaría de Estado de Tributación (SET) administers national taxes. Paraguay has one of Latin America's lowest tax burdens (~12% of GDP) and has used flat low rates to attract foreign residents (MADES visa) and financial activity. No wealth tax exists.
Uruguay vs Paraguay: Key Tax Differences (2026)
💰 Income Tax: 🇺🇾 Uruguay has a higher top income tax rate (0–36% vs 8–10%). 🇵🇾 Paraguay is more favourable for high earners.
🛒 VAT/Sales Tax: Uruguay has a higher consumption tax (10–22% vs 10%).
🏢 Corporate Tax: 🇵🇾 Paraguay offers a lower corporate rate (10% vs 25%), which can influence business location decisions.
📈 Capital Gains: 🇵🇾 Paraguay taxes investment gains at a lower rate (10% vs 12%), benefiting investors.