Uruguay expat tax: the 11-year tax holiday

Uruguay gives new residents something few countries offer: up to 11 years with no tax on foreign dividends, interest, rent and capital gains. The rules were rewritten from 1 January 2026, and the option most people chose before, a permanent 7% rate, has closed to new arrivals.

This guide covers Uruguayan personal tax for people moving to or living in Uruguay in the 2026 tax year, which is the calendar year. We've converted pesos at about UYU 40 to the US dollar (the Social Security Bank's reference rate was UYU 40.29 in September 2026). Many limits are set in indexed units (UI), worth about UYU 6.66, or in BPC, worth UYU 6,864 in 2026.

The key question is simple. Is your income earned by working in Uruguay, or is it investment income from abroad? Uruguay treats the two very differently.

What's changed: the 2025 to 2029 budget law, Law 20.446 of 16 December 2025, changed how Uruguay taxes foreign investment income from 1 January 2026. Residents pay 12% on foreign rent and foreign capital gains as well as foreign dividends and interest. New residents get a new 11-year tax holiday, with an investment test unless they spend more than 183 days a year in Uruguay. The permanent 7% option closed on 31 December 2025. A transparency rule now taxes you on passive income held through foreign companies and trusts where you own 5% or more. Under Decree 95/026, Uruguayan banks and brokers now withhold tax on foreign income, paying it over to the DGI from July 2026.

📋 Uruguay tax at a glance for 2026

The 11-year tax holiday on foreign income

Image 1 — new residents get 11 years of 0% on foreign income

The new regime is article 24-BIS of the income tax law, added by Law 20.446. If you become tax resident on or after 1 January 2026, you can choose to be taxed as a non-resident on your foreign capital income for the year you become resident and the following ten years. Non-residents aren't taxed on foreign income, so your foreign dividends, interest, rent and gains are tax free for those 11 years.

You qualify if you weren't Uruguayan tax resident in the two previous years and you didn't use the old holiday. You also need one of these:

• More than 183 days in Uruguay in each year you use the holiday. No investment is needed on this route.

• Property in Uruguay worth more than UI 12,500,000 (about US$2.1 million), bought from 1 September 2025. Outside the coastal departments, the cost of urban property counts double.

• At least UI 625,000 a year (about US$104,000) put into investment funds for productive projects, research or innovation that meet the Ministry of Economy and Finance's conditions.

The holiday only covers foreign capital income. Pay for work done in Uruguay and Uruguayan investment income are taxed normally. You make the choice once, with the tax authority (DGI).

When the 11 years end

You then pay 12% on your foreign capital income like any other resident, unless you choose one of two options each year:

• Half rate for five years: 6% instead of 12%, if you keep investing UI 625,000 a year in qualifying funds or own Uruguayan property worth more than UI 6,250,000 (about US$1 million).

• A fixed annual amount: UI 1,875,000 a year (about US$312,000) covers all your foreign capital income, or less in some years and for some investors. This only makes sense for very large portfolios.

If you moved to Uruguay before 2026

The old rules still apply. If you chose the old 11-year holiday or the permanent 7% rate, you keep it. If your old holiday was still running on 31 December 2025, the law lets you choose the new fixed annual amount when it ends.

👉 Law 20.446, article 648: the new regime for incoming residents (in Spanish)

👉 Decree 148/007 as updated to September 2026: residence rules and holiday conditions (in Spanish)

👉 DGI: tax holidays for people who became resident before 2026 (in Spanish)

When you become tax resident in Uruguay

You're Uruguayan tax resident for a calendar year if any one of these applies:

• you spend more than 183 days in Uruguay. Any part of a day counts, and trips abroad of up to 30 days still count as days in Uruguay unless you prove you're resident somewhere else

• your main base of activities is in Uruguay, meaning you earn more there than in any other single country. Investment income alone doesn't count

• your vital interests are in Uruguay. This is presumed if your spouse and dependent children live there

• your economic interests are in Uruguay through an investment

The investment routes are property worth more than UI 15,000,000 (about US$2.5 million), a company investment over UI 45,000,000 (about US$7.5 million) in a project declared of national interest, or a company investment over UI 15,000,000 that creates 15 new full-time jobs. There's also a cheaper route: property worth more than UI 3,500,000 (about US$583,000), bought from 1 July 2020, plus at least 60 days in Uruguay in the year.

The 60-day property route makes you resident, but on its own it doesn't qualify you for the new tax holiday.

How you stop being resident

Residence is tested each calendar year, so you stop being resident in a year where none of the tests applies. Some tests don't depend on days at all. Your spouse and children living in Uruguay create a presumption that you're resident, and property above UI 15,000,000 can keep you resident while you live abroad unless you prove tax residence in another country with a certificate from its tax authority.

The DGI issues tax residence certificates on form 5202, once you can prove the test you meet. For the investment routes, a certificate can only be issued for a completed year.

👉 DGI: applying for a tax residence certificate as an individual (in Spanish)

Income tax rates for 2026

Uruguay's personal income tax, IRPF, taxes work income on a progressive scale set in BPC.

Uruguay income tax rates on work income for 2026

Source: Social Security Bank (BPS) Comunicado R 5/2026, IRPF scales for 2026 (BPC UYU 6,864). Annual bands are 12 times the monthly bands.

Deductions work as a credit: you take 14% of your contributions and child allowances off your tax, or 8% if your income is above UYU 1,235,520 a year. The 13th-month bonus (aguinaldo) is taxed separately at your top rate.

Investment income is taxed at flat rates: 12% in most cases, including foreign dividends, interest, rent and gains, and 7% on dividends from Uruguayan companies.

👉 BPS: IRPF scales and values for 2026 (in Spanish)

👉 DGI: how IRPF works for employees (in Spanish)

Worked example

• You're single with no children and earn UYU 4,000,000 (about US$100k) in 2026 for a job in Uruguay: 12 monthly salaries of UYU 307,692 plus an aguinaldo of the same amount.

• Your contributions are UYU 747,230: 15% pension on the capped UYU 288,836 a month, 4.5% health (FONASA) and 0.1% to the retraining fund (FRL).

• Income tax is UYU 688,328 on your salary and UYU 76,923 on the aguinaldo at 25%, less a credit of UYU 59,778 (8% of your contributions). That leaves UYU 705,473.

Your all-in bill is about UYU 1,452,700, or 36% of your salary. Income tax alone is about 18%.

Freelancing in Uruguay

Self-employed income from work done in Uruguay is taxed on the same scale, after a flat 30% deduction for expenses. Large Uruguayan clients and the state withhold 7% from your invoices once you bill them more than UI 10,000 a month.

Contributions depend on who you are. University-qualified professionals pay a fixed monthly amount to the professionals' pension fund (CJPPU) that rises with years of practice. For professionals entitled to practise from 2026, it starts at UYU 7,566 a month in category 1 and moves up a category every two years, to UYU 33,574 in category 15, but you can choose to stay at category 4 (UYU 13,051). Other freelancers register with BPS and pay pension contributions on a notional salary category they choose. Professionals also pay FONASA health contributions of 3% to 8%, depending on income and family, worked out from what they invoice.

On US$100k of fees, a professional in category 1 pays about 18% all-in: UYU 443,588 income tax, UYU 90,792 to the professionals' fund and up to UYU 180,000 FONASA. At category 4 it's about 19%, and at category 15 about 25%.

You can opt for business income tax (IRAE) instead, for at least three years. It becomes compulsory once your services income passes UI 4,000,000 a year.

👉 DGI: IRPF and IASS guide, including self-employed income (in Spanish)

Crypto, investments and pensions

From 1 January 2026, residents outside the holiday pay 12% on foreign interest, dividends, rent and capital gains, with a credit for foreign tax paid.

• Gains: taxed on the profit, or on 20% of the sale price for assets abroad (2.4% of the price) and 15% of the price for property abroad (1.8%). Listed assets held before 2026 take their 31 December 2025 value as cost.

• Foreign companies and trusts: if you own 5% or more of a foreign entity that earns passive income, that income is taxed as yours when the entity receives it.

How is crypto taxed in Uruguay? There are no tax rules written for crypto, and no general DGI guidance on crypto gains. Under the general rules, a gain on an asset is taxed at 12%, or on 20% of the sale price for assets abroad. Whether a crypto gain counts as Uruguayan or foreign, and whether the holiday covers it, isn't settled.

Uruguay taxes pensions through a separate tax, IASS. It only applies to pensions built from contributions to Uruguayan schemes, so a pension from a foreign scheme isn't taxed, even if a Uruguayan entity pays it.

Uruguay has a net wealth tax (Impuesto al Patrimonio), but it only reaches assets in Uruguay. The tax-free amount for 2025 was UYU 6,653,000 (about US$166,000) for an individual, doubled for a family, and half the value of your main home is deducted, up to a limit. Foreign portfolios are outside it, so we haven't lowered the investment and retiree ratings for it.

👉 DGI: new categories of foreign income taxed from 2026 (in Spanish)

👉 Decree 95/026: rules for foreign capital income and gains (in Spanish)

👉 Income tax law (Title 7), updated March 2026: rates and the holiday (in Spanish)

👉 DGI: wealth tax guide for individuals, 2025 (in Spanish)

Social security

Employees pay 15% to the pension system on monthly earnings up to UYU 288,836 in 2026. FONASA health contributions are 3% on low earnings and 4.5% to 8% above 2.5 BPC, depending on whether you have a spouse or children to cover. On top of that, 0.1% goes to the retraining fund. Employers pay 7.5% pension, 5% FONASA and 0.1% FRL.

Remote workers on the nomad permit don't have to register with BPS.

👉 BPS: current values, including the 2026 contribution ceiling (in Spanish)

👉 BPS: FONASA health contribution rates (in Spanish)

👉 BPS: guide to contributions, including FRL and self-employed FONASA (in Spanish)

Double tax treaties

Does Uruguay have double tax treaties? Yes. The DGI lists 25 in force, including with the UK, Spain, Germany, Portugal, Italy, Switzerland, Mexico, Chile, Brazil, Argentina, Japan, Singapore and the UAE. A treaty with Colombia has been signed but isn't in force.

👉 DGI: status of Uruguay's double tax treaties (in Spanish)

The digital nomad permit

Remote workers for employers or clients abroad can stay on a provisional identity document (Hoja de Identidad Provisoria). It lasts 180 days and can be renewed once for another 180 days. There's no income requirement. You apply to the National Migration Directorate with the identity document you entered on and a sworn statement. To renew, you also need a criminal record certificate and a vaccination record.

The permit has no tax exemption attached. Stay more than 183 days in a calendar year and you're tax resident. Uruguay taxes work income where the work is done, so pay for work you physically do in Uruguay can count as Uruguayan income even when your employer is abroad. To stay longer, you apply for one of the ordinary residence categories.

👉 Government of Uruguay: provisional identity document, including the digital nomad route (in Spanish)

👉 Decree 394/009, article 8: remote work for foreign entities (in Spanish)

Who is Uruguay good for?

How does Uruguay compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including social security and health contributions.

☑️ Who is Uruguay good for? Tax ratings for expats in 2026

Filing and deadlines

The tax year is the calendar year. Returns for 2025 income were filed from 29 June to 31 August 2026, and any balance could be paid in five instalments from 31 August to 30 December 2026. Returns for 2026 income will follow the same pattern in 2027, on dates the DGI publishes in its calendar.

Employees with one employer who squares up the tax in December usually don't need to file. You'll usually need to file if you have self-employed income or foreign capital income, and in some cases if you have more than one employer. Foreign capital income is declared and paid on form 1146.

👉 DGI: 2026 deadlines for IRPF returns (in Spanish)

Frequently asked questions

How does Uruguay's tax holiday work in 2026?

New residents from 2026 who weren't resident in the two previous years can pay no tax on foreign capital income for the year they arrive and the next ten. You need more than 183 days a year in Uruguay, property over UI 12,500,000 or UI 625,000 a year in qualifying funds.

Can I still get the permanent 7% rate in Uruguay?

No. The permanent 7% option closed on 31 December 2025, though people who chose it keep it. New residents pay 12% once the holiday ends, or 6% for five years if they meet an investment test.

How do you become tax resident in Uruguay?

You're resident if you spend more than 183 days in Uruguay in a calendar year, earn more there than anywhere else, have your spouse and children living there, or hold a qualifying investment, such as property over UI 3,500,000 plus 60 days a year.

What are the income tax rates in Uruguay in 2026?

Work income is taxed from 0% to 36%, with the first UYU 576,576 tax free. Most investment income is taxed at 12%, and Uruguayan dividends at 7%.

Is a foreign pension taxed in Uruguay?

No. Uruguay's pension tax, IASS, only applies to pensions built from contributions to Uruguayan schemes. The paying country may still tax it.

How many double tax treaties does Uruguay have?

The DGI lists 25 double tax treaties in force, including with the UK, Spain, Germany, Portugal, Italy, Switzerland, Mexico, Chile, Brazil and Japan.