Special Regimes in Paraguay: The DNIT Proposes Reviewing Maquila and Free Trade Zones in 2026
The rules of fiscal planning for international investors in South America are undergoing a strategic shift. The director of the National Directorate of Tax Revenues (DNIT), Óscar Orué, has publicly raised the need to evaluate the incentives that support the country’s main export engines. Rather than opting for a general tax increase that would impact consumption, the administration is focusing directly on optimizing the benefits of the special regimes in Paraguay.
- Focus of the reform: Review of exemptions in Maquila, Free Trade Zones, and the Raw Materials Law.
- Guaranteed stability: A VAT increase or modifications to Personal Income Tax (IRP) are categorically ruled out.
- State goal: Expand the tax base by reducing informality and limiting benefits to sectors that the tax authority considers consolidated.
- Opportunity for the investor: The need to professionally structure company formation is more evident than ever to safeguard profitability.
The collection dilemma: Why target incentives?
The tax authority’s argument is pragmatic. Over the last few years, tax collection in Paraguay has grown organically through technology and evasion control, without the need to raise the general tax burden. However, to sustain the pace of state development in 2026, the Government seeks to identify areas where tax expenditures —that is, the money the State stops receiving by granting exemptions— have completed their maturity cycle.
Increasing VAT would generate an immediate inflationary spiral that would directly affect small businesses and the final consumer. On the other hand, modifying the IRP offers very low returns for public coffers due to its high level of deductibility. Under this premise, the tax authority is focusing its sights on export and industry regimes.
“If we can eliminate one or two or decrease or limit those exemptions, perhaps more will be collected, and that sector that is currently benefiting will contribute more” — Óscar Orué, Director of the DNIT.
Impact comparison: Current fiscal structure vs. Review lines
To understand how this perspective may affect your future corporate structure, we analyze the current landscape against the points under technical review:
| Regime / Tax | Current Scheme in Paraguay | DNIT Proposal (2026) | Perspective for the Investor |
|---|---|---|---|
| Maquila Regime | Unique 1% tax on national value-added. | Limitation or rate review for consolidated industries. | Requires rigorous operational design and origin cost analysis. |
| Free Trade Zones | Free Zone Tax (0.5% on exports) and tariff exemption. | Evaluation of input import exemptions. | Attractiveness intact for global logistics, but requires supply chain planning. |
| Value Added Tax (VAT) | General rate of 10% (5% for basic goods). | No changes proposed (inflationary impact risk ruled out). | Absolute peace of mind for internal commercial operations and daily consumption. |
| Personal Income Tax (IRP) | Progressive rates from 8% to 10% with broad deductions. | No changes expected due to its low direct collection impact. | Keeps Paraguay as one of the most attractive destinations for active tax residency. |
What does this mean for those planning to set up a company in Paraguay? It means that the window of opportunity remains excellent, but the era of simplistic or improvised structures has ended. The economic substance of corporate projects will be key to sustaining tax benefits.
The opinion of our ParaguayWay experts
The intention to review benefits for large industries or exporters should not be interpreted as a sign of instability, but rather as the natural evolution of a maturing market. Paraguay continues to offer one of the lowest tax burdens in the region, a fundamental fact for any international business strategist analyzing the global map of taxes in Paraguay.
Our recommendation for clients seeking to optimize their global wealth is clear: fiscal diversification must be planned by anticipating these regulatory movements. The combination of a solid corporate structure and a properly managed legal residency mitigates any minor adjustment in special regimes.
Last week, an investor from the European Union contacted us with the fear that Paraguay might lose its competitiveness due to these legislative debates on Maquila. After evaluating their technology services business model, we demonstrated that the combination of a simplified general regime and correct dividend distribution continued to yield a net tax burden in the single digits, well below European standards, offering stability that no other country in the region can guarantee today.
If you are evaluating structuring your foreign trade operations or simply want to ensure the transition of your family wealth in a predictable and secure fiscal environment, relying on a team that knows the reality of the DNIT firsthand is indispensable.
To analyze how these measures will impact your specific business model and design a tailor-made plan, let’s analyze your relocation case without obligation and prepare your arrival in Paraguay with full legal certainty.