Under the personal income tax law, effective from 1 July 2007, individuals are subject to income tax in Uruguay.
Resident individuals are subject to tax on their Uruguayan-source income. They are also subject to tax on certain foreign-source income, such as capital gains and work income, if certain conditions are met. Income subject to the tax is divided into the categories of capital gains (Category I) and labor income (Category II).
The basic rate of personal income tax on capital gains is 12%.
Tax on labor income applies to income derived from dependent or independent work. A specified amount of income is not subject to tax. The tax is imposed at progressive rates ranging from 10% to 30%.
Income from pension funds is subject to the Tax of Assistance to Social Security. This tax is similar to the personal income tax.
Nonresident individuals are subject to income tax on their Uruguayan-source income at a rate of 12%. They are also subject to tax on their income from technical services performed abroad if certain conditions are met.
In addition, a 4% (2% for the seller and 2% for the buyer) transfer tax is imposed on sales of real estate.
Net worth tax. In general, individuals owning assets in Uruguay must pay tax on their net worth at year-end at progressive rates ranging from 0.7% to 1%. However, for nonresident individuals who are not subject to nonresidents’ income tax, the rates vary from 0.7% to 1.5%. A tax-free allowance of UYU3,340,000 may be deducted.
Inheritance and gift taxes. Transfers of real estate by gift or inheritance are subject to the 4% transfer tax, except for inheritances from direct line of consanguinity, which is subject to a 3% transfer tax.
Contributions. Self-employed individuals pay social security taxes on notional amounts of income rather than on actual earnings. The amounts are established by law.
Contributions are paid by employers and employees at the rates set forth in the following table.
|Type||Employer (%)||Employee (%)||Self employed (%)|
|Medical care||5||3 to 8||8|
|Tax on salaries (b)||0.125||0.125||0.25|
a) This rate applies to the portion of income that does not exceed approximately UYU131,430.
b) This is a tax on salaries that is paid to the social security body (BPS).
Totalization agreements. To provide relief from double social security taxes and to assure benefit coverage, Uruguay has entered into totalization agreements, which usually apply for a maximum period of one year, with the following jurisdictions.
Argentina Ecuador Netherlands
Austria El Salvador Paraguay
Belgium France Peru
Bolivia Germany Portugal (c)
Brazil Greece Spain
Canada Israel Switzerland
Chile Italy United States (b)
Colombia Luxembourg Venezuela (d)
Costa Rica (a)
a) This treaty has not yet been approved by Costa Rica.
b) This agreement applies only to pensions. A totalization agreement is being negotiated.
c) This treaty is in the process of renegotiation and is not fully applicable.
d) This treaty is in force, but some dispositions were not regulated.
Tax filing and payment procedures
Married persons have the option to be taxed jointly or separately for purposes of the personal income tax and the net worth tax.
Uruguay has entered into double tax treaties with the following jurisdictions:
- Argentina (entered into force and effective since February 2013)
- Ecuador (entered into force in November 2012 and effective since January 2013)
- Finland (entered into force in February 2013 and effective since January 2014)
- Germany (renegotiated and effective since 2012)
- Hungary (effective since January 1994; obsolete in certain aspects)
- India (entered into force in June 2013 and effective since January 2014)
- Korea (South) (entered into force in January 2013 and effective since January 2014)
- Liechtenstein (entered into force in September 2012 and effective since January 2013)
- Malta (entered into force in November 2012 and effective since January 2013)
- Mexico (entered into force in December 2010 and effective since January 2011)
- Portugal (entered into force and effective since September 2012)
- Romania (entered into force in October 2014 and effective since January 2015)
- Spain (entered into force in April 2011 and effective since January 2012)
- Switzerland (effective since January 2012)
Most foreign nationals must obtain valid entry visas to enter Uruguay. However, foreign nationals of certain jurisdictions do not need entry visas to enter Uruguay if they stay for less than three months, or in some cases, if they stay for less than one month. These jurisdictions include the following.
Andorra Greece Panama
Argentina Grenada Paraguay
Armenia Guatemala Peru
Australia Guyana Poland
Austria Honduras Portugal
Bahamas Hong Kong Romania
Barbados SAR Russian
Belgium Hungary Federation
Belize Iceland St. Kitts and
Bolivia Ireland Nevis
Brazil Israel St. Vincent and
Bulgaria Italy the Grenadines
Canada Jamaica San Marino
Chile Japan Serbia
Colombia Korea (South) Seychelles
Costa Rica Latvia Singapore
Croatia Liechtenstein Slovak Republic
Cyprus Lithuania Slovenia
Czech Republic Luxembourg South Africa
Denmark Macau Spain
Dominican Malaysia Sweden
Republic Malta Switzerland
Ecuador Mexico Trinidad and
El Salvador Monaco Tobago
Estonia Netherlands Turkey
Finland New Zealand Venezuela
France Nicaragua United Kingdom
Georgia Norway United States
Foreign nationals may enter Uruguay under temporary or permanent visas.
Different types of temporary visas are available for an individual to stay in Uruguay. An additional visa may be required to enter the country.
Temporary visas are available to the following temporary resident individuals:
- Migrant workers
- Scientists, researchers and academics
- Professional, technical and skilled personnel
- Students, trainees and interns
- Businesspersons, entrepreneurs, directors, managers and consultants
- Sports persons
- Religious individuals
Temporary visas are available to the following nonresident individuals:
- Tourists (foreigners entering the country for recreation, leisure or rest)
- Individuals invited by public or private entities because of their profession or art
- Members of public, artistic or cultural performances
- Members of international transport crews
- Passengers in transit
- Individuals in local border traffic
- Members of crews of fishing vessels
- Members of crews performing transshipments in the country
- Individuals who come for medical treatment
- Journalists and other professionals in the media
- All persons not included in the preceding items who are expressly authorized by the National Directorate of Immigration
A foreign national may work in Uruguay under a permanent visa, or under one of the temporary visas described above, for a period lasting the length of the employment contract. If the period is less than 180 days, a provisory identity sheet of the identity card should be requested.
An applicant may work in Uruguay while his or her work permit application and other papers are being processed.
No limitations are imposed on foreign nationals wishing to start businesses or head subsidiaries in Uruguay.
Permanent residence visas
Permanent visas are issued to foreign nationals who intend to establish permanent residence in Uruguay.
To obtain a permanent visa, an application must be filed either in the foreign national’s home country or in Uruguay, accompanied by the following documents:
- Passport or equivalent document
- Health certificate
- Proof of financial means
- Criminal records
- Identity card or document
- Birth certificate
- Uruguayan address certificate
After all documents are submitted, the approximate time for obtaining a visa is three to six months.
Family and personal considerations
Family members. The working spouse of a work permit holder is not automatically authorized to work in Uruguay; a separate application must be filed at the same time as that of the expatriate.
Driver’s permits. A foreign national may drive legally in Uruguay with his or her home country driver’s license only while he or she is applying for a local driver’s license.
To obtain a local driver’s license in Uruguay, an applicant must pass a written exam on specific Uruguayan traffic rules, as well as a physical exam.
Uruguay does not have driver’s license reciprocity with other countries.