The Tax Hub

The income tax treaty between Paraguay and Qatar was signed on 11 February 2018. The treaty is the first of its kind between the two countries.

Taxes Covered

The treaty covers Qatari income tax and Paraguayan individual income tax, corporation tax, income tax on agricultural business, and income tax on small businesses.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel in a Contracting State if the activities continue for the same or connected project for a period or periods aggregating more than 6 months within any 12-month period.

Withholding Tax Rates

• Dividends – 15%
• Interest - 6% for interest from bank loans or insurance companies, regulated by each country's regulation; otherwise 15%
• Royalties – 15%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

• Gains from the alienation of immovable property situated in the other State; and
• Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State.

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Entry into Force and Effect

The treaty will enter into force once the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.