Uruguay taxes on a hybrid basis: Uruguay-source income is taxed for residents and non-residents alike, while foreign-source income of residents has historically been largely outside the tax base under Uruguay's territorial-leaning system - though this changed significantly as of January 2026: Uruguay now taxes residents' foreign capital income directly, at 12% (or 8% if withheld at source), with a look-through rule specifically targeting income held through offshore structures. New residents can still claim a one-off tax holiday on foreign income, tied to the year they become resident. Uruguay operates a self-assessment system.
The Uruguayan tax year is the calendar year.
Uruguay's headline corporate income tax (CIT) rate is 25%.
The headline personal income tax (PIT) rate is residents 36%; non-residents 12%.
The standard VAT/GST (or equivalent consumption tax) rate is 22% (10% reduced rate).
Uruguay applies center-of-vital-interests and habitual-abode tests for individual tax residency, alongside investment-based routes: since a 2020 decree, a foreigner spending at least 60 days a year in Uruguay and purchasing real estate above roughly UI 3.5 million (approximately USD 378,000 at the time of the decree), or investing over UI 15 million in a business creating at least 15 full-time jobs, qualifies for tax residency. Uruguay uses a source-based system for most income - even residents are not taxed on worldwide income for most categories. Passive foreign-source capital income (interest, rents, royalties, capital gains) was taxed at a flat 12% for residents from 2011; as of January 2026, this was restructured (see Tax System above) so that residents' foreign capital income is now taxed directly at 12% (or 8% if withheld at source), with a look-through rule targeting offshore-structure holdings.
A non-Uruguayan entity has a Uruguay permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Uruguay on the entity's behalf, following the OECD Model Treaty definition as applied under Uruguayan domestic law and any applicable tax treaty.
Uruguay has no corporate CFC regime. However, under the 2017 Fiscal Transparency Law, individual Uruguayan residents holding interests in foreign entities (including trusts) generating passive income, where that entity is resident in a low-tax jurisdiction (effective rate under 12%) without an information-exchange DTT or TIEA in force with Uruguay, are taxed on the entity's undistributed profits - a narrow, individual-only look-through rule rather than a general corporate CFC regime.
Uruguay has no thin capitalization rules.
Uruguay does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Uruguay does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; consistent with Uruguay's territorial (or primarily source-based) system described in Tax System above, foreign-source income generally falls outside the domestic tax base rather than being reported and then taxed.
Uruguay does not provide a broad participation exemption for foreign dividends in the European sense; the 2026 reform to Uruguay's foreign capital income taxation (see Tax System above) is the more consequential recent development affecting how foreign-sourced returns are actually taxed.
Uruguay has a foreign tax credit mechanism for foreign tax paid on the foreign-source income newly brought into the Uruguayan tax base under the 2026 reform, capped at the Uruguayan tax otherwise due on that income.
Per KPMG's detailed treaty listing, Uruguay has 25 double tax treaties in force: Argentina, Belgium, Brazil, Chile, Ecuador, Finland, Germany, Hungary, India, Italy, Japan, Liechtenstein, Luxembourg, Malta, Mexico, Paraguay, Portugal, Romania, Singapore, South Korea, Spain, Switzerland, the United Arab Emirates, the United Kingdom, and Vietnam. A further treaty with Colombia was ratified by Uruguay's Parliament in September 2024 but remains pending Colombian ratification and is not yet in force. Separately, Uruguay maintains more than 30 tax information exchange agreements (TIEAs), including with Australia, Canada, Denmark, France, Iceland, and Norway.