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Personal Taxation in Uruguay


Uruguay personal income tax rates are progressive to 25%. Individuals in Uruguay are subject to income tax, net worth tax and social security taxes. Both resident and non-resident individuals are taxed on their Uruguayan-source income.

Residents are subject to Personal Income Tax (IRPF), while non-residents are subject to Non-residents Income Tax (IRNR). It is considered Uruguayan-sourced the income that stems from activities developed, goods placed or rights used in Uruguay. These taxes are applied on a dual basis:

• Category I: Capital gains and equity increases;
• Category II: Income derived from work (employees and independent workers).

In order to determine the taxable income for Category II, two amounts need to be calculated. The mentioned rates are applied to the gross income, whether received in cash or kind, and results in a "primary tax". It is important to mention that independent workers' gross income admits a 30% deduction as notional expenses, so the rates are applied over the 70% of the gross income.

Finally, the tax is the result of deducting the "deductions tax" from the "primary tax". Regarding dependant workers, the tax to be paid by employees is withheld by the employer and an annual adjustment must be done by the employer. The employee is responsible for filing a tax return in which all the work revenues received during the year must be considered, but only if he/she is included in any of the following situations: the employee works for two or more employers or works as a dependant and independent worker simultaneously. On the other hand, dependant workers have to fill in a form in which they inform certain deductions that are admitted and the annual adjustment acts as a tax return.

Married couples living together have the option for joint assessment. There is a non-taxable amount ($104) and it is doubled for married couples.

Individuals are taxed at progressive rates ranging from 0.7% up to 2.25%.

Both resident and non-resident individuals are taxed on their Uruguay-source income. An individual is considered resident if he/she is in Uruguay for more than 183 days in the calendar year, or if the individual's economic or centre of vital interests is in Uruguay.

Joint assessment for married couples is permitted. A different scale of rates is applicable to individuals who opt for joint assessment.

Taxable Income

Personal Income tax (IRPF) or IRNR is levied on Uruguayan-source income obtained by employees or independent workers. Pensions and annuities paid by Uruguayan entities are subject to a different tax, called the IASS.

Capital Gains

Capital gains are taxed at a flat rate of 12%.

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