Taxes in Uruguay for foreigners and expats in 2026

Uruguay tax rates in 2026 at a glance

For years Uruguay was known as a country where the tax office did not care what a resident earned abroad. Since 1 January 2026 that is no longer true: Budget Law 20,446 brought foreign rental income and gains on foreign shares and property into the 12% tax net, and from 2026 Uruguayan banks and brokers withhold the tax and pay it to the state themselves.

The rest of the system barely moved. Salaries are taxed on a progressive scale of up to 36%, company profits at 25%, and the standard VAT (IVA, Impuesto al Valor Agregado) is 22%. There is no inheritance tax, and the wealth tax for residents is almost symbolic at 0.1%.

Taxes are collected by the DGI (Dirección General Impositiva), Uruguay's tax authority, and contributions by the BPS (Banco de Previsión Social), the state social security fund. The currency is the Uruguayan peso (UYU): in 2026 one US dollar buys about 40 pesos.

Most thresholds in the law are set not in pesos but in reference units. The BPC (Base de Prestaciones y Contribuciones) is the benefits and contributions base: Decree 11/026 set it at 6,864 pesos for 2026, about 170 dollars. The UI (Unidad Indexada) is an inflation-indexed unit that the National Statistics Institute recalculates daily; in 2026 one UI is worth about 6.65 pesos. Below, all such amounts are converted to pesos and dollars, and a comparison with other countries is on the page taxes and tax residency by country.

Compare taxes in 146 countries: relocation taxes 2026

Who is a tax resident of Uruguay

You do not need to spend half a year in Uruguay to become its tax resident. It is enough for a spouse and minor children to live here permanently, or to own Uruguayan property worth more than 3.5 million UI (about 23 million pesos, 580,000 dollars) and spend at least 60 days a year in the country.

The status changes everything. A resident pays IRPF (Impuesto a la Renta de las Personas Físicas), the personal income tax, on a progressive scale and on part of their foreign income; a non-resident pays only IRNR (Impuesto a la Renta de los No Residentes), the non-resident income tax, and only on Uruguayan income. Residence is assessed per calendar year.

Tax residence and a residence permit are two different things. Migration status is granted by the National Migration Directorate, while the DGI decides tax status on the facts: days, family, income and assets. You can hold a Uruguayan ID card for years and remain a tax non-resident, and the other way round.

The status is proven by a tax residence certificate (certificado de residencia fiscal). Since 3 February 2026 the application, form 5202, is filed online through the DGI portal. The certificate is needed to claim treaty benefits and to show your former country that your tax home has moved.

People moving from Russia face a trap: Russia counts 183 days within any 12 consecutive months rather than a calendar year, so both statuses can overlap in the same year. How days are counted in different countries is explained in our guide to tax residency and the 183-day rule, and general conditions for living in the country and residence permits are on the Uruguay page.

Uruguay tax residency: how to become a resident and count the days

Uruguay makes you resident if a calendar year holds more than 183 days. But you need not live there half a year: a centre of business or economic interests in the country is enough, as is a spouse and minor children living here permanently.

A resident pays progressive tax on local income and on some foreign income: dividends and interest. A non-resident pays only on Uruguayan income. The status is confirmed by a General Tax Directorate certificate.

The law does not stop you from confirming the status on your own. But mistakes cost more: an investment structured the wrong way gives no status, and your former country keeps treating you as its own. Murblz support removes these risks: we choose the ground, count days and obtain the certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

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Uruguay income tax rates and take-home pay

Uruguay does not tax the first 48,048 pesos a month (about 1,200 dollars) at all, but the scale climbs fast after that: from 102,960 pesos, roughly 2,600 dollars, every extra peso is taxed at 24%, and the top rate of 36% is on a par with Europe. The scale is tied to the BPC and shifts with it every January.

On an annual basis the tax-free band is 576,576 pesos, and the 36% rate starts at 9,472,320 pesos. Spouses can file as a family unit (núcleo familiar) under a separate scale, which pays off when one partner earns a lot and the other little.

Deductions: why the tax is lower than the scale suggests

In Uruguay deductions do not reduce income; they turn into a discount on the tax. The total of deductions is multiplied by 14% if annual income does not exceed 180 BPC (1,235,520 pesos), or by 8% if it does. The result is subtracted from the tax computed on the scale.

• Contributions to the BPS, the FONASA health fund and the labour retraining fund - in full.
• Children under 18: 20 BPC a year per child, 137,280 pesos; twice that for a child with a disability.
• Rent of a permanent home: 8% of the rent is credited against the tax if the landlord is named in the return.
• Interest on a mortgage for a sole home within a set value limit.

There is also a rule working the other way. If a salary exceeds 10 BPC (68,640 pesos) a month, it is notionally increased by 6% for monthly withholding. This is how the employer collects in advance the tax on the thirteenth salary (aguinaldo), which in Uruguay is paid in two halves, in June and December.

Worked example: a salary in Montevideo

A single employee with no children, on a contract with a Uruguayan company, tax resident. Contributions: 15% to the pension system, 4.5% to FONASA and 0.1% to the retraining fund.

How the middle row works. The 100,000-peso salary is increased by 6% to 106,000. Tax on the scale: 10% of 20,592 pesos (2,059), 15% of 34,320 (5,148) and 24% of 3,040 (730), a total of 7,937 pesos. The deduction is 14% of 19,600 in contributions, or 2,744 pesos. That leaves 5,193 pesos withheld each month. The employer pays another 12.625% on top, 12,625 pesos, so the full cost of the employee is 112,625 pesos. In December the employer recalculates the tax for the year, and the final figure may differ slightly.

A non-resident earning the same salary for work in Uruguay pays IRNR of 12% on the whole amount with no deductions and no scale: at 50,000 pesos that is more than a resident pays, at 250,000 it is less.

Social security contributions in Uruguay for employees, employers and sole traders

Social security costs a Uruguayan employee more than income tax: on an average salary almost one peso in five goes to the BPS, while IRPF takes about 5%. The money pays for pensions, public healthcare, sickness and unemployment benefits.

FONASA (Fondo Nacional de Salud) is the National Health Fund: through it the employee and their family get health cover at a clinic of their choice. The employee rate depends on family and salary:

• 3% - salary up to 2.5 BPC (17,160 pesos) a month; 5% if, at that salary, a spouse is a dependant.
• 4.5% - salary above 2.5 BPC, no dependent spouse and no children.
• 6% - salary above 2.5 BPC, minor children, no dependent spouse.
• 6.5% - salary above 2.5 BPC, a dependent spouse, no children.
• 8% - salary above 2.5 BPC, both a dependent spouse and children.

In 2026 pension contributions are charged only on the part of a salary up to a ceiling that BPS revises every year (about 289,000 pesos a month, roughly 7,200 dollars): anything above that is free of pension contributions. The health contribution has no such cap.

What sole traders and graduate professionals pay

The owner of a sole proprietorship (empresa unipersonal) pays contributions not on actual income but on a notional amount chosen from a set of categories. The 2026 minimum for trade and services with no employees is 8,833 pesos a month, about 220 dollars, including FONASA health cover for a single owner with no children. Without FONASA it is 4,594 pesos.

Self-employed university graduates (doctors, lawyers, architects, engineers) have their own pension fund, the Caja de Jubilaciones y Pensiones de Profesionales Universitarios, and pay into it rather than the BPS.

Remote work for a foreign employer is a separate story. Since 1 August 2023, Law 20,130 has required people living in Uruguay who work for foreign firms with no presence in the country to pay contributions themselves, unless they are insured in the employer's country under a social security agreement. The rules are softer for digital nomad permit holders - details on the page Uruguay digital nomad visa.

Does Uruguay tax foreign income, and what happened to the tax holiday

Yes, and since 2026 much more broadly. Budget Law 20,446 of 16 December 2025, covering 2025-2029, added rent from foreign property and gains on the sale of foreign assets to the foreign dividends and interest that residents have been taxed on since 2011. All of this income is taxed at a single rate of 12%. The details were set out in Decree 95/026 of 6 May 2026 and DGI Resolution 1517/026.

The notional method helps when there are no documents proving the purchase price: the taxable gain is deemed to be 15% of the sale price of property or 20% of the sale price of securities, hence 1.8% and 2.4%. For listed securities bought before 2026, the acquisition cost can be taken at the market price on 31 December 2025, so gains built up earlier are not taxed. Tax paid abroad is credited, but not beyond the Uruguayan tax.

The tax is collected locally. Local brokers holding a client's foreign securities withhold 8% on a cumulative basis, banks and other agents 12%; brokers holding clients' securities paid the first withholdings to the DGI in June-August 2026, while the DGI extended the first payment deadline for other agents to October 2026. Where there is no intermediary, the resident pays 12% advances twice a year. The rules do not cover foreign royalties, brand and patent licences or income from derivatives.

For large portfolios the law offers an alternative: a fixed payment of 1,875,000 UI a year (about 12.5 million pesos, 310,000 dollars) for up to 20 years instead of calculating tax on each item of foreign income. The DGI is still working out the details of this option.

Tax holiday for new residents: the 2026 rules

The tax holiday lets a new resident be taxed on foreign passive income under the rules for non-residents. IRNR taxes only Uruguayan income, so in practice foreign dividends, interest, rent and capital gains are fully exempt.

The key change: the old route of property worth 3.5 million UI plus 60 days a year no longer opens the holiday, although it still makes you a resident. Without 2 million dollars for property or about 100,000 dollars a year for funds, one path is left - actually living in Uruguay for more than half the year.

The uncomfortable truth for remote workers: the holiday covers only passive income. A salary or fee for work physically done in Uruguay counts as Uruguayan income, and none of the regimes exempts it.

Uruguay corporate income tax and dividends

A Uruguayan company hands 25% of its profit to the state, and when dividends are paid the owner loses another 7%. Together that is about 30% of profit. The 25% rate alone is 2.5 times Paraguay's 10% next door and well below Brazil's, which reaches 34% with surcharges.

IRAE (Impuesto a las Rentas de las Actividades Económicas), the tax on business income, follows the territorial principle: it taxes profit from activities in Uruguay, property in Uruguay and rights used in the country. There are no municipal taxes on profit.

Losses can be carried forward for 5 years. Expenses are fully deductible only if the recipient itself pays at least 25% tax on the payment; if less, the deduction is cut proportionally. Trading companies that buy and sell goods abroad without bringing them into Uruguay compute profit notionally as 3% of the trading margin, giving an effective rate of 0.75%.

From 2026 the budget law added two rules. The sale of a stake in a foreign company is taxed in Uruguay if more than half of its assets are in the country or its Uruguayan assets exceed 31.5 million UI (about 5 million dollars). And dividends paid to a foreign owner are taxed at 7% even out of exempt profit if that owner's country taxes them anyway and credits the Uruguayan tax.

Where corporate tax can be zero

• Free trade zones (zonas francas). User companies are exempt from all national taxes, including IRAE and VAT. In return, Law 15,921 requires at least 75% of staff to be Uruguayan citizens, or at least 50% in services, and real presence is checked.
• Software development. Income from proprietary software is exempt from IRAE, but only for companies with a team in the country and a registered product. Sole traders and individuals cannot use it.
• Investment Law 16,906. Approved projects reduce IRAE by part of the amount invested; the government's COMAP commission decides project by project.

A company and a bank account can be opened without relocating, and Murblz specialists handle both: company registration in Uruguay, business account in Uruguay, and help choosing a jurisdiction on the page company formation abroad.

VAT in Uruguay: 22%, 10% and when you pay nothing

Uruguay's standard VAT of 22% is one of the highest in Latin America: Paraguay charges 10%, Chile 19%, Argentina 21%. But exports of goods and services are zero-rated, and a shopper paying by debit card gets an instant 2-point discount.

Every business must register for VAT; there is no separate registration threshold as in Europe. Companies file and pay monthly, self-employed professionals every two months. Electronic invoicing (e-factura) is mandatory for all local companies. Small businesses with turnover of up to 1,959,229 pesos a year pay a fixed amount instead of VAT on each sale - see the next section.

Foreign platforms selling digital services to people in Uruguay also pay VAT. Film and series streaming and the intermediation of online marketplaces are subject to both VAT and a 12% withholding tax.

Taxes for sole traders in Uruguay: freelancers, IT and digital nomads

A Uruguayan sole trader (empresa unipersonal) can pay as little as 5,910 pesos of VAT a month, about 148 dollars, and not a peso of profit tax - but only while annual turnover stays under 49,000 dollars. Above that limit a freelancer moves to the general regime: income tax on a scale of up to 36% and 22% VAT, except on exported services.

Simplified regimes: Monotributo and small business

For very small businesses Uruguay offers two regimes in which a fixed amount replaces VAT and profit tax. Both are capped by turnover, and Monotributo is also designed for sales to final consumers.

If all invoices are electronic, a small business pays the lower of two amounts: the fixed VAT or 3.3% of the month's turnover. BPS social security contributions are paid separately.

A freelancer on the general regime

A self-employed resident pays the same IRPF on the same scale, but not on all revenue: 30% is written off as notional expenses with no receipts needed, and tax is charged on the remaining 70%. Advances are paid every two months, and the annual return is filed between late June and August of the following year.

Worked example. A developer earns 3,000 dollars a month from foreign clients, about 120,000 pesos, and lives in Uruguay for more than 183 days. The taxable base is 84,000 pesos a month, 1,008,000 a year. Tax on the annual scale: 10% of 247,104 pesos and 15% of 184,320 pesos, about 52,360 pesos a year in total, or 4,360 pesos (about 110 dollars) a month - 3.6% of revenue before deductions. On top come BPS contributions: at least 8,833 pesos a month for a sole trader. VAT on exported services consumed abroad is 0%, but the exemption has to be set up correctly at registration.

Once revenue exceeds 4 million UI a year (about 26.6 million pesos, 665,000 dollars) or the activity combines labour and capital, IRPF ends and IRAE of 25% on actual profit begins, with company-style bookkeeping and reporting.

IT specialists, expats and nomads

• Law 20,191 for IT professionals. A technician or developer relocating to work as an employee of a Uruguayan company can, for 5 years (the year of arrival plus 4), pay the 12% non-resident tax instead of IRPF and opt out of BPS contributions. Conditions: not a Uruguayan tax resident in the previous 5 years and spending at least two thirds of the days in the country. The regime was originally open to employment contracts started by 28 February 2025; the budget bill sent to parliament on 31 August 2025 proposed extending it and widening it to other sectors, so before a move Murblz specialists check whether the regime applies to a new contract.
• Employed expats. A foreigner working for a Uruguayan company pays IRPF and contributions like a local employee; there is no special expat regime.
• Digital nomads. The nomad permit (Decree 238/022) is a migration document with no tax benefits. Working from Uruguay for a foreign client counts as Uruguayan income by law. The full analysis is on the page Uruguay digital nomad visa.

The zero tax on software income often attributed to Uruguay goes only to companies with a team in the country, not to a solo freelancer with a laptop. For a remote worker whose only income is their own labour, Uruguay is not a tax haven.

Property, car, inheritance and crypto taxes in Uruguay

Buying a flat in Uruguay costs 2% in tax on the cadastral value, selling costs another 2% plus tax on the gain, and owning it means a municipal levy and a wealth tax that residents barely notice. The most noticeable annual bill is usually not for the flat but for the car.

Sales, rentals and exemptions

The seller pays 12% on the difference between the sale price and the purchase price adjusted for inflation; documented renovation costs reduce the base. The tax is withheld by the notary (escribano) handling the deal and paid over within 15 business days. The sale of a sole permanent home is exempt if it is worth no more than 1.2 million UI (about 8 million pesos, 200,000 dollars), at least half of the proceeds go into a new home within 12 months, and the new home is worth no more than 1.8 million UI (about 300,000 dollars).

Small rentals can also be tax-free: if annual rent is no more than 40 BPC (274,560 pesos, about 6,900 dollars), other capital income is no more than 3 BPC (20,592 pesos) and the owner authorises the DGI to lift banking secrecy. The exemption is claimed by application to the DGI.

Wealth tax: residents and non-residents pay differently

The wealth tax (Impuesto al Patrimonio) is charged on assets in Uruguay net of certain debts on 31 December. For 2025, with the return filed in 2026, the tax-free threshold was 6,653,000 pesos per person and double that for a family. Residents, and non-residents who pay IRNR in Uruguay, pay 0.1% above the threshold. Other non-residents pay on a scale from 0.7% to 1.5%.

Worked example. A resident owns a flat in Montevideo valued for tax at 10 million pesos. The wealth tax is 0.1% of 3,347,000 pesos, about 3,350 pesos (84 dollars) a year.

Cars, inheritance and cryptocurrency

Vehicle tax is collected by the single system SUCIVE (Sistema Único de Cobro de Ingresos Vehiculares) based on the car's market value: 5% for new cars registered in 2026, 4.5% for most used cars, 3% for new electric cars and 2.25% for used ones. A 30,000-dollar car costs 1,350-1,500 dollars a year.

Uruguay has no inheritance or gift tax. Heirs pay only ITP when real estate located in the country passes to them. Foreign assets are inherited free of Uruguayan tax, and inheritance is not treated as a sale under the new tax on foreign capital gains either.

Cryptocurrency is the least clear area. The DGI classes it as intangible movable property. If an asset is deemed located in Uruguay, the gain on sale is subject to IRPF, and under the notional method that works out at 2.4% of the sale price. There is no official test for where a crypto asset is located, and no specific rules for 2026, so it is wise to document transactions in advance.

Non-resident taxes and double tax treaties

There is no double tax treaty between Uruguay and Russia, and there never has been: no treaty was ever signed. So the question of treaty suspension, which Russia settled in 2023 for unfriendly states including the EU and the US, does not apply to Uruguay - there is nothing to suspend. There are no treaties with Ukraine, Belarus or Kazakhstan either.

A non-resident pays IRNR in Uruguay only on Uruguayan-source income, and the payer almost always withholds it.

Uruguay has about 25 treaties in force, among others with Spain, Germany, Portugal, Italy, the United Kingdom, Switzerland, Luxembourg, the UAE, Brazil, Chile, Mexico, Paraguay, India and Japan. The treaty with Colombia was signed in 2021 and ratified by Uruguay but has not yet entered into force. Treaties cut withholding at source: dividends paid to Spain, for example, drop to 0-5%.

What this means for Russians and other nationals without a treaty

As long as Russian tax residence is kept, Russia taxes worldwide income on a scale from 13% to 22%. Article 232 of the Russian Tax Code credits tax paid abroad only if there is an international treaty. There is none with Uruguay, so Uruguayan tax will not be credited in Russia and the same income will be taxed twice.

The only way out is to stop being a Russian tax resident, which means spending fewer than 183 days in Russia within 12 consecutive months. Russia will continue to tax Russian-source income, such as rent from a Moscow flat or dividends from Russian companies, at non-resident rates. Uruguay is the more generous side here: under its own law it credits tax paid abroad on passive income up to its own 12%. If the Russian tax is not lower, nothing more is due in Uruguay, and on a tax holiday such income is not taxed in Uruguay at all.

Ukrainian citizens have no treaty either, so the risk of double taxation remains until tax residence changes. The page taxes and tax residency by country helps compare Uruguay with neighbours whose tax logic is different.

What it means if you move: returns, deadlines and penalties

Uruguay pays off for people with a portfolio abroad, not a salary. An investor who spends more than 183 days a year in the country pays no tax on foreign dividends, interest and capital gains for 11 years. A remote worker with the same income pays IRPF of up to 36% and BPS contributions like any local professional.

What to file and when

For late payment the DGI charges a penalty of 5%, 10% or 20% of the amount, depending on how long the payment is overdue, plus a monthly surcharge of about 1%. The tax office receives data from Uruguayan banks and brokers and exchanges information with dozens of countries, so an undeclared foreign account surfaces sooner or later.

Steps before and after the move

• Work out in advance the year Uruguayan residence starts and the year Russian residence ends: the holiday and double taxation both depend on it.
• Gather documents on the purchase price of foreign assets: without them tax will have to be worked out on the notional method from the sale price.
• Decide on the tax holiday in the year residence is obtained: the regime can be chosen only once, and only by those who were not Uruguayan residents in the two previous years.
• Register with the DGI and BPS before the first invoice to a client if you plan to work as a sole trader or freelancer.
• Obtain a tax residence certificate (form 5202) to prove the change of status to your former country.

Who Uruguay does not suit

Those looking for zero tax on everything: neighbouring Paraguay, with rates of up to 10% and a territorial system that leaves foreign income untaxed, is cheaper. Those not ready to spend half the year in the country: without that, the holiday opens only through property worth 2 million dollars or annual investments of about 100,000 dollars in investment funds. And those who remain Russian tax residents: with no treaty, a salary earned in Montevideo is taxed twice.

For families planning to stay for the long term, taxes are only part of the decision. A child born in the country gets a passport straight away - see the page giving birth in Uruguay and citizenship by birth; adults go through a residence permit and naturalisation in Uruguay. Murblz specialists prepare the tax calculation, DGI registration and the documents for the holiday, and in disputes with the tax office Murblz legal support steps in.

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