Paraguay introduces mandatory reporting of cryptocurrency transactions

Paraguay's National Tax Agency has approved new rules for reporting digital asset transactions. The corresponding resolution, signed on March 10 by the head of the agency, requires cryptocurrency platforms and individuals to provide detailed reports on their financial transactions. The first returns for the 2026 fiscal year must be filed through the national tax system in early 2027.

This decision marks a significant shift in the country's approach, which saw a record number of residency applications in 2025, largely due to liberal crypto regulations and the lack of automatic exchange of financial information with other countries.

What must be declared

The resolution applies to two categories of individuals:

Platform operators registered in Paraguay are required to report every transaction of their users, regardless of the amount. Resident individuals and local legal entities whose annual digital asset turnover exceeds the equivalent of USD 5,000 in aggregate must submit their own information declaration. This requirement applies to transactions conducted through foreign platforms or direct transactions between individuals without the involvement of an intermediary.

Disclosure Requirements

Disclosure requirements are as specific as possible. For each transaction, the following must be provided:

Date and time

Counterparty details (if identifiable) or crypto wallet addresses

Asset name, ticker symbol, and blockchain network

Asset quantity to ten decimal places

Value in USD before fees

All fees, including the network transaction fee

Unique transaction identifier with sender and recipient addresses

In cases where the counterparty is identified, their full name, citizenship, country of tax residence, and taxpayer identification number must be provided.

According to tax planners, this resolution is a signal to anyone who chose Paraguayan tax residency, believing that disclosure obligations are limited. While the country's territorial tax system has not formally changed, a new reporting infrastructure is being built around it, which is a harbinger of a potential fiscal burden.

Broad Regulatory Scope

The resolution broadly defines the term "cryptoasset" to include any cryptographically protected digital representation of value or rights on a distributed ledger. This regulation covers value tokens, utility tokens, stablecoins, and non-fungible tokens. An exception is made only for central bank digital currencies and instruments already regulated by securities law.

The term "platform" is similarly broadly defined. The resolution covers:

centralized exchanges;

decentralized exchanges and protocols;

Wallets, both those that store funds on the provider's behalf and those that allow the user to fully control their assets;

trading platforms for non-fungible tokens;

passive income and lending services;

smart contracts;

any other technological mechanisms facilitating crypto transactions, regardless of the availability of a financial license.

New Realities for Investors

Paraguay has historically not participated in the international system for the automatic exchange of financial information, which has attracted individuals interested in financial privacy. The new resolution does not change this status, but creates a national mechanism for monitoring crypto assets, similar to standards being developed internationally. It is worth noting that dozens of jurisdictions have already begun collecting data according to such standards since the beginning of 2026.

Experts note a pattern: a jurisdiction attracts capital with a favorable tax regime, the community of beneficiaries grows, and the government tightens regulations over time. Crypto investors are exploiting the structural features of the legislation, but the regulator is constantly adapting, providing only a temporary advantage.

The resolution does not introduce new taxes. The preamble to the document emphasizes that the measure is being implemented within the tax authority's existing authority to identify economic transactions involving cryptoassets due to their growing importance, and that adequate identification and tracking will strengthen control and compliance with tax obligations. According to industry publications, this resolution is considered the first stage of a broader program, which could be followed by phases related to direct taxation and enforcement during 2026.

A fixed penalty of approximately $130 is established for late filing of the tax return. Residents who meet the criteria but are not tax registered are required to register specifically for compliance with the new requirements.

Parallel Regulation and Implications for Advisors

The resolution complements the previously adopted securities market law, which assigns oversight of tokenized assets to a special securities department.

Thus, the two regulators operate in parallel: the tax department covers all crypto transactions, including decentralized assets used as a medium of exchange, while the securities department focuses on tokenized investment instruments.

As a reminder, Paraguay's territorial tax system only taxes locally sourced income at a flat rate of 10 percent, and its residency program requires an investment of just $70,000 in a local business for ten years. This combination has made the country a popular destination for crypto asset holders, especially after the modernization of its immigration laws late last year.

For investment migration specialists recommending Paraguay to clients with crypto assets, the new rules significantly increase their responsibilities in terms of compliance verification. Consulting on tax residency issues can no longer be limited to references to the zero rate, given that the IRS is clearly harmonizing its standards with international recommendations, and the global information exchange system is already operational in dozens of jurisdictions. The era of passive tax planning through territorial jurisdictions for cryptoasset owners is ending.

If you are planning to obtain a residence permit, invest in the economy of a country, open a business in the EU, or purchase foreign real estate, we invite you to a consultation with our firm. During a personal online meeting, we will thoroughly examine your questions and develop a step-by-step action plan for you.