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Tax rates in Uruguay

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT) - Impuesto al valor agregado (IVA)
Tax Rate
22%
Reduced Tax Rate
Certain essential foodstuff, medicines, soap, tourist services, health services, and services supplied by hotels in “high season” to resident individuals are subject to a reduced rate of 10%.
Certain goods and services are exempt: foreign currencies, securities, bonds, stocks and other financial transactions, milk, books, newspapers, magazines, educational material, agricultural machinery, water, and services supplied by hotels in “low season” to resident individuals.
Exports of goods are zero-rated.
Final consumers can enjoy a reduced rate of 18% for transactions up to UYU 16,000, and a 20% rate for operations above this value, when the payment is made through debit cards or electronic money instruments.
Other Consumption Taxes
Uruguay implements a commercialisation tax: IMESI (in Spanish) (Impuesto Especifico Interno, Specific Internal Tax), applied only to the first sale. Depending on the type of good, it is calculated based on the real sale price or on the official price set by the state. Goods subject to the highest rates are alcoholic beverages (from 20.20% to 80%, depending on the alcohol degree), tobacco (from 28% to 70%), lubricants (from 5% to 35%), and gasoline, fuel, and other petroleum products (from 5% to 133%).
 
Find out more about Taxes and Accounting in Uruguay on GlobalTrade.net, the Directory for International Trade Service Providers.
 

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Corporate Taxes

Company Tax
25%
Tax Rate For Foreign Companies
Uruguay applies a territorial system of taxation, hence resident and non-resident entities are subject to taxation on their income realised in Uruguay. A company is considered resident if it is established according to Uruguayan law.
A 12% withholding tax is imposed on Uruguayan-sourced income obtained by non-residents, except in cases where the income is obtained through the operations of a permanent establishment in the country.
Capital Gains Taxation
Capital gains are taxed as ordinary income at the corporate tax rate of 25%.
Bearer title transfer capital gains are subject to a 12% tax rate, applicable to a notional 20% of the transfer price (20% of the market value of the titles transferred if there is no price).
Main Allowable Deductions and Tax Credits
Documented expenses necessary to obtain and preserve gross taxable income are generally tax-deductible.
Depreciation (using the straight-line method) is deductible at variable rates depending on the nature of the asset. On the other hand, goodwill cannot be deducted for tax purposes. Start-up costs can be amortised over a period of three to five years (to be determined by the company). Interest charges and bad debts (for debts not recovered within 18 months or longer) are generally deductible.

Donations to charities give rise to deductions at variable rates depending on the recipient organisation. Donations to certain types of organisation (educational services, health, youth support) are deductible up to 25% of the amount, the rest is converted into a tax credit.

Fines and taxes paid (except property tax) are not tax-deductible.

Tax losses can be carried forward up to five years (up to 50% of net taxable income for tax years beginning on or after 1 January 2017), once adjusted for inflation. However, as of 2021 the aforementioned cap has been eliminated. The carryback of losses is not permitted.
Other Corporate Taxes
Employers are required to withhold payroll taxes on behalf of their employees at rates ranging from 18.1% to 23.1% (depending on the employee's family status). Employers contribute 12.625% of the salary.

A property tax is levied by municipalities on real estate at variable rates. Property transfer taxes are payable by both the seller (2%) and the buyer (2%).

All enterprises are required to pay a wealth tax of 1.5% (which applies only to property and securities domiciled in Uruguay). At the moment of incorporation, companies are required to pay a flat tax at a rate of 1.5% on the basis of a notional amount updated every year (ICOSA tax - UYU 41,513 in 2021). Furthermore, the tax is also due annually for corporations at the end of each fiscal year at a rate of 0.75% on the basis of the same notional amount.

If a company does not distribute net taxable income after three fiscal years, such amounts are treated as a deemed distribution and are subject to a 7% deemed dividend tax.

Other Domestic Resources
General Tax Administration (DGI)
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Uruguay Latin America & Caribbean United States Germany
Number of Payments of Taxes per Year 20.0 28.2 10.6 9.0
Time Taken For Administrative Formalities (Hours) 163.0 327.5 175.0 218.0
Total Share of Taxes (% of Profit) 41.8 46.8 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal income tax brackets 2021 (employment income) Progressive rate from 0% to 36%
Up to UYU 409,080 0%
UYU 409,081 – 584,400 10%
UYU 584,401 – 876,600 15%
UYU 876,601 – 1,753,200 24%
UYU 1,753,201 – 2,922,000 25%
UYU 2,922,001 – 4,383,000 27%
UYU 4,383,001 – 6,720,600 31%
Over UYU 6,720,600 36%
Capital investment (interest, rents, royalties, capital gains) 12%
Allowable Deductions and Tax Credits
Deductions are allowed for contributions to social security, a small fixed amount per minor child and his/her education, feeding, health, and housing, certain payments on mortgage loans. Taxpayers with a monthly income lower than 15 BPC ("Base de Prestaciones y Contribuciones" - UYU 73.050 in 2021) will be able to deduct 10% of the deductions, while the individuals whose income is greater than 15 BPC will only be able to deduct an 8% rate of the total deductions.
6% of the annual rent paid for permanent housing may be credited against the annual tax liability.
Certain bad debts, intermediary commissions, renewal and subscription fees, real estate tax, and contributions are deductible from real estate income originated in real estate leases.

Self-employed individuals can enjoy an income reduction of 30% for expenses calculated on a notional basis.

Special Expatriate Tax Regime
Both resident and non-resident individuals are taxed on income derived from activities developed in, property located in, or rights economically used within the Uruguayan territory.
An individual is considered resident if he/she is in Uruguay for more than 183 days in the calendar year or if his/her economic or center of vital interests is in Uruguay.

Individuals who became tax resident before 2020 could opt for a six-year tax holiday on foreign-source income. Individuals who become tax resident from 2020 may opt for an 11-year tax holiday on foreign-source income or a permanently reduced tax rate of 7% on that income.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of double taxation agreements
Withholding Taxes
Dividends: 0 (resident company)/7%, Interest: 0 (resident company)/7% or 12% (depending on the term and currency of the loan)/25% (interest paid to a resident of a tax haven), Royalties: 0 (resident company)/12%/25% (royalties paid to a resident of a tax haven)

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Sources of Fiscal Information

Tax Authorities
Overview of Uruguay's tax measures in response to Covid-19
General Tax Administration (DGI)
Other Domestic Resources
Customs Office

Find out more about Taxes and Accounting in Uruguay on GlobalTrade.net, the Directory for International Trade Service Providers.

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Latest Update: April 2022