Uruguay Tax Landscape 2026: Everything You Need to Know, in One Page

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You are looking at Uruguay as a base for your life, your company or your investments, and you want the full tax picture on one page. This hub explains how the 2026 system works, the main taxes, the newcomer regime, moving in and out, and running a business, with a link to every detailed guide.

Uruguay taxes in 2026: the key figures

Is this guide for you?

Read on if you…

• are thinking about moving to Uruguay and want to know what you would owe;
• earn from foreign clients, an employer or a portfolio and want to understand the territorial system;
• want one map of all Uruguayan tax topics before going into detail.

Probably not your case if you…

• only visit Uruguay on holiday, with no local income or property;
• need the detailed rules of one topic. Jump straight to the guides listed at the end.

How does the Uruguayan tax system work?

Territorial, with one big exception

Uruguay taxes income with a Uruguayan source: activities carried out, assets located or rights used in Uruguay. Where you live or where you are paid does not change the source. Work you do physically in Montevideo for a client in Berlin is Uruguayan-source income.

The exception: since 2011, residents also pay IRPF on foreign passive income, meaning dividends and interest from abroad. Foreign rent, foreign pensions and, traditionally, foreign capital gains stay outside.

The main laws and institutions

The current system comes from the 2007 tax reform, Law 18.083, which created IRPF and IRNR alongside IRAE. Procedures and penalties follow the Tax Code (Decree-Law 14.306). The tax authority is the DGI (Dirección General Impositiva). Social security is managed by the BPS (Banco de Previsión Social).

Who is a tax resident?

You are resident in a calendar year if you spend more than 183 days in Uruguay, or if your centre of economic or vital interests is there. Centre of vital interests means, basically, where your spouse and minor children live. Since 2020, buying property above 3.5 million UI and spending 60 days in the country also counts. Full rules: tax residency in Uruguay.

What are the main taxes in Uruguay?

Personal income tax

Work income is taxed progressively in brackets of BPC (Base de Prestaciones y Contribuciones), a reference unit updated every January. Rates run 0%, 10%, 15%, 24%, 25%, 27%, 31% and 36%. Self-employed people deduct a flat 30% of their fees. Residents can also claim deductions, mainly through a tax credit: see personal tax deductions and benefits in Uruguay.

Capital income and gains

Rent, interest, dividends and capital gains on Uruguayan assets are taxed at a flat 12%, separately from work income. Property bought before July 2007 can use a deemed gain of 15% of the price. Details: capital gains tax in Uruguay and cryptocurrency taxes in Uruguay.

Other taxes

The wealth tax only covers assets in Uruguay. Property transfers carry 2% ITP for each side. Departments levy an annual property tax. All of these are covered in specific taxes in Uruguay.

Which special regimes exist for newcomers?

Uruguay's flagship incentive is the new-resident tax holiday, extended by Law 19.904 of 2020. If you were not resident in the previous five years, you choose:

1. Exemption of foreign dividends and interest for the year you arrive plus 10 more years.
2. A permanent 7% rate on that income instead of 12%.

Here's the catch: it does not cover work income earned while living in Uruguay. Remote workers can also apply for a digital nomad identity document. Full details: tax incentives for expats and digital nomads in Uruguay.

Moving in and moving out

Moving in

Tax residency and immigration residency are separate. You need a residence permit from the Dirección Nacional de Migración, a cédula (ID card) and registration with the DGI if you earn local income. Plan the year you arrive, since it starts your 11-year holiday. The practical guide to obtaining your tax residency in Uruguay has the steps.

Moving out

Good news: Uruguay has no exit tax. Once you are no longer resident, only Uruguayan-source income stays taxable, through IRNR. Close your DGI and BPS registrations properly and keep proof of your new residence. See the practical guide to ceasing your tax residency in Uruguay.

Running a business in Uruguay

Companies pay 25% IRAE on profit, and distributions carry 7%, for a combined burden of about 30.25%. Most freelancers start as a sole proprietor under IRPF, then switch to IRAE or a company when income grows. Very small businesses can use Monotributo or Literal E, which replace income tax and VAT with a fixed monthly payment.

The common company forms are the SAS (simplified stock company), the SRL (limited liability company) and the SA (corporation). Free trade zones offer exemption from national taxes for qualifying activities. Software exports may benefit from an IRAE exemption if enough work is done in Uruguay.

Read legal forms of business in Uruguay, corporate income tax in Uruguay and business expenses in Uruguay. Penalties for errors and hidden income are explained in tax fraud regulations of Uruguay.

Common mistakes (and what they cost)

• Assuming "territorial" means remote income is tax-free → IRPF of up to 36% on work done from Uruguay, plus fines.
• Not electing the new-resident regime → 12% on foreign dividends and interest that could have been exempt.
• Ignoring social security as a self-employed person → BPS or Caja Profesional debts and blocked certificates.
• Keeping a home and family in your old country → dual residence and a treaty tie-breaker you might lose.
• Assuming Uruguayan assets escape wealth tax → annual IP on local property and deposits above the threshold.

Frequently asked questions

Does Uruguay tax worldwide income?

No. Uruguay taxes Uruguayan-source income. The main exception is foreign dividends and interest received by residents, taxed at 12%, or exempt for 11 years for new residents. Foreign rent and foreign pensions are not taxed. Work performed physically in Uruguay is Uruguayan-source, even for foreign clients.

What is the income tax rate in Uruguay in 2026?

Work income is taxed progressively from 0% to 36% in brackets expressed in BPC units. Capital income such as rent, interest and gains is taxed at a flat 12%, with 7% on dividends from Uruguayan companies. Companies pay 25% corporate income tax (IRAE). Non-residents pay 12% on Uruguayan-source income.

How do I become a tax resident of Uruguay?

Spend more than 183 days in Uruguay in a calendar year, or have your main economic or family base there. Investment routes also exist, such as buying property above 3.5 million UI and spending at least 60 days a year in the country. You can then request a tax residency certificate from the DGI.

What is the VAT rate in Uruguay?

The basic VAT rate is 22%. A 10% minimum rate applies to basic food, medicines, hotel services and some health services. Exports of goods and qualifying services to foreign clients are zero-rated. Very small businesses pay a fixed monthly amount, called IVA mínimo, instead of charging regular VAT.

Does Uruguay have a wealth or inheritance tax?

Uruguay has a wealth tax (Impuesto al Patrimonio) but it only applies to assets located in Uruguay, above an annual threshold. There is no inheritance tax as such. When Uruguayan real estate is inherited, the transfer tax (ITP) applies. Foreign assets are outside both.

How does Uruguay compare with Paraguay or Mexico?

Paraguay is also territorial, with lower rates of 8% to 10% on income and 10% corporate tax. Mexico taxes residents on worldwide income at up to 35%. Uruguay sits in between, with higher rates but strong stability and an 11-year holiday on foreign passive income. Compare the Paraguay and Mexico hubs.

Uruguay tax guides

• Practical guide to obtaining your tax residency in Uruguay – the steps, documents and timeline to become resident.
• Tax residency in Uruguay – the 183-day, economic and family tests explained.
• Practical guide to ceasing your tax residency in Uruguay – how to leave cleanly, with no exit tax.
• Cryptocurrency taxes in Uruguay – how crypto gains and income are treated.
• Personal tax deductions and benefits of Uruguay – deductions and credits that reduce your IRPF.
• Legal forms of business in Uruguay – SAS, SRL, SA and sole proprietorship compared.
• Specific taxes in Uruguay – VAT, wealth tax, transfer tax and excise duties.
• Capital gains tax in Uruguay – 12% on gains, the pre-2007 shortcut and exemptions.
• Tax incentives for expats and digital nomads in Uruguay – the 11-year holiday and the nomad permit.
• Tax fraud regulations of Uruguay – fines, criminal penalties and how to correct errors.
• Business expenses in Uruguay – what your business can deduct and the proportional rule.
• Corporate income taxes in Uruguay – 25% IRAE, dividends and free trade zones.

Related guides

• Tax landscape overview of Paraguay
• Tax landscape overview of Mexico
• Tax landscape overview of Costa Rica
• Tax incentives for expats in Uruguay
• Tax residency rules in Uruguay
• All country tax guides

Sources

• Dirección General Impositiva (DGI) – Uruguay's tax authority
• IMPO – Official legislation database of Uruguay (Law 18.083, Law 19.904)
• Banco de Previsión Social (BPS) – Social security
• Ministry of Economy and Finance of Uruguay
• Uruguay XXI – Investment and export promotion agency
• PwC Worldwide Tax Summaries – Uruguay

This guide is general information, not personalised tax advice. See how we research and review.