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United States to Paraguay Tax Savings Calculator

Compare your United States tax burden (up to 37%) to Paraguay's 0% tax on foreign income.

United States Tax System

  • • Top rate: 37%
  • • Type: worldwide taxation
  • • Self-employment: 15.3%
  • • Capital gains: 15.0%

Paraguay Tax System

  • • Foreign income: 0%
  • • Type: Territorial taxation
  • • Self-employment: 0% (foreign clients)
  • • Capital gains: 0% (foreign assets)
  • • Crypto: 0%
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Moving from United States to Paraguay

The United States uses a worldwide tax system, meaning US citizens and residents are taxed on all income regardless of where it's earned. Combined federal rates range from 10-37%, plus state taxes (0-13.3%), plus 15.3% self-employment tax for freelancers. Paraguay's territorial system taxes only Paraguay-sourced income at 10%, with foreign income completely tax-free.

Pay 0% tax on remote work income
No tax on foreign dividends or capital gains
Crypto gains are completely tax-free
Simple residency process (4-8 weeks)
Low cost of living ($1,200-1,800/month)
No minimum income or investment required

Frequently Asked Questions

How much can Americans save moving to Paraguay?

Americans earning $100,000 in foreign income can save $15,000-25,000 annually by becoming Paraguay tax residents. The FEIE excludes up to $130,000 of foreign-earned income from US tax, and Paraguay charges 0% on foreign income. Self-employed Americans save an additional 15.3% in SE tax.

Do US citizens still have to file taxes living in Paraguay?

Yes, US citizens must file US taxes regardless of residence. However, the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit can significantly reduce or eliminate US tax liability on foreign-earned income. Consult a cross-border tax professional.

Can I use the Foreign Earned Income Exclusion in Paraguay?

Yes, if you meet either the Physical Presence Test (330 days outside US in 12 months) or Bona Fide Residence Test, you can exclude up to $130,000 (2025) of foreign-earned income using the FEIE.

What about US state taxes when living abroad?

Some US states continue taxing former residents. California, for example, has strict rules. Most digital nomads establish residency in no-income-tax states (Florida, Texas, Nevada, etc.) before moving abroad to avoid state tax complications.

Ready to Learn More?

Read our complete guide to Paraguay taxes and residency

Paraguay Tax GuideResidency Cost Calculator