Information on Taxes in Uruguay

Uruguay continues to be a solid, offshore haven, with little tax burden on foreign residents.

Income and holdings from outside Uruguay are not taxed…and in fact are not even disclosed.

Uruguay has strong laws on tax secrecy as well as banking secrecy, so “what’s reported in Uruguay stays in Uruguay”. And what you do report is not of public record.

Let’s take a look at some of the specific taxes that may apply to you.

Value Added Tax (VAT): This tax is known throughout the Spanish-speaking world as the Impuesto al Valor Agregado, or IVA, and is basically a sales tax—a rather large sales tax. The tax is always referred to by its Spanish acronym—IVA—and pronounced “EE vah”.

The basic rate for IVA in Uruguay is 22% for most goods, and 14% for certain basic goods. Like most of the world’s countries—and unlike the U.S.—this sales tax is included in the marked price of an item; taxes are not added at the register.

Property taxes: The municipal property tax (known as contribucióninmobiliaria) runs from 0.25% to 1.2% of the market value of the property.

There is also a school tax, known as impuesto a la enseñanzaprimaria. The rate is approximately 0.1% to 0.3% of the market value. This tax does not apply to rural properties.

Income tax for individuals: Personal Income Tax on wages or fees as an independent worker (known as IRPF) is only paid on income generated within Uruguay, on the amount over 173,124 pesos per year ($8,656 at today’s exchange rates). The tax rate ranges from 10% to 25%, and certain expenses are deductible. The IRPF is paid by Uruguayan citizens and foreign residents who are in Uruguay more than 183 days per year.

Rental income tax for individuals: Individuals who rent out their property must pay a flat income tax of 12%. This is not in addition to the personal income tax above.

Capital gains tax: The capital gains tax rate is 12% for individuals, 12% for foreign corporations, and 25% for Uruguayan corporations.

 

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