Belgium-Paraguay tax treaty: what its absence means for you

Are you Belgian and considering Paraguay? Then you've probably looked for the tax treaty between Belgium and Paraguay. Short answer: it doesn't exist. There is no double taxation treaty between Brussels and Asunción. And contrary to what one might think, for an aspiring expatriate, this is far from bad news. Here's why.

No Treaty: What it Means in Practice

A tax treaty serves to allocate the right to tax between two countries and prevent the same income from being taxed twice. When it doesn't exist, each country freely applies its domestic law. In the Belgian-Paraguayan case, this absence works in your favor for a simple reason: Paraguay applies territorial taxation. Foreign-sourced income of Paraguayan tax residents is simply not taxed there. So, there's not much to "allocate": Paraguay claims nothing on what you earn elsewhere.

Consequence 1: Everything Hinges on Your Belgian Tax Departure

Without a treaty to arbitrate, the real question becomes: are you still a Belgian tax resident, yes or no? Belgium taxes its residents on their worldwide income, with rates that quickly climb above 50%. As long as your tax domicile remains in Belgium (home, center of your economic interests), the Belgian tax authorities will follow you, Paraguay or not. A successful expatriation therefore requires a clean exit: deregistration, real transfer of your center of life, and a solid and documented Paraguayan tax resident status, supported by your cédula and RUC. This is exactly what our Paraguayan tax residency support covers.

Consequence 2: Your Belgian-Sourced Income Remains Taxed in Belgium

The absence of a treaty does not eliminate Belgian tax on what remains in Belgium. If you keep a rental property in Liège or dividends from a Belgian company, Belgium continues to levy its share as the source state, including withholding tax. The difference is that once you are a Paraguayan tax resident, the story ends there: Paraguay adds nothing on top. For many of our Belgian clients, the strategy is therefore to gradually shift their income to non-Belgian sources, which then fall to 0%.

Consequence 3: For Your Foreign Income, the 0% Applies Without Treaty Conditions

This is the point that Belgians discover with the most pleasure. Dividends from a foreign broker, freelance income invoiced outside Belgium, capital gains, private pensions paid from a third country: as a Paraguayan tax resident, this foreign-sourced income is not taxed in Paraguay. No treaty is needed to benefit from this; it is provided for by Paraguayan domestic law (Law 6380/2019). While an expatriate in a treaty country must scrutinize every article of the treaty, the Paraguayan resident relies on a simple principle: what comes from abroad is not taxed.

The Certificate That Serves as Proof to the Belgian Administration

One practical point remains: proving your new status. In case of inquiry from the Belgian tax authorities, your best ally is the Paraguayan tax residency certificate, issued by the DNIT once your residency, cédula, and RUC are in order. This document formalizes your tax connection to Paraguay and solidifies your case.

In Practice: 2 Days in Paraguay Are Enough

Obtaining Paraguayan residency is much simpler than imagined: a 2-working-day visit to Asunción with our packages starting from €1,400, and we manage the entire process with you. For a complete overview of the process, consult our A-Z guide to expatriation in Paraguay, then contact us on WhatsApp at +595 971 362 302 to discuss your situation. Over 200 cases supported, 100% acceptance.