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Uruguay: Taxes and Costs

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Income is now taxed in Uruguay

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	10.3%	10.2%	10.2%
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Source:			Disclaimer

INDIVIDUAL TAXATION

Non-residents are taxed on their Uruguayan-sourced income. Married couples are assessed and taxed separately.

INCOME TAX

Income is classified into two categories: capital income and capital gains, and income from dependent or independent personal services and pension. Calculation of taxable income and applicable income tax rate depends on the classification of income.

Tax on Capital Income and Capital Gains

Capital income realized by individuals is subject to 12% tax. Rental income and capital gains realized from selling Uruguayan property are considered as capital income.

RENTAL INCOME
Rental income is taxed at 12%, withheld at source. When calculating the taxable income, the following are deductible: real estate taxes, property tax for basic education, notary fees of the lease contract, administration costs, housing agency commission, capital losses and bad debts.

CAPITAL GAINS
Capital gains are taxed at 12%. Taxable capital gains are the difference between the sales price and acquisition costs, which is updated by taking into account the Consumer Price Index.

NET WORTH TAX (Impuesto al Patrimonio, IAP)

Non-residents are taxed at a flat rate of 2% on their net worth exceeding the prescribed tax-free amount (minimo no imponible or MNI), which is established annually by the central government. For 2007, it is fixed at UYU1,811,000 (US$75,616) for individuals and estates. For family units or couples filing jointly, the tax-free amount is UYU3,622,000 (US$152,232).

The taxable base is the difference between taxable assets (including properties, assets and rights within the country) and deductible liabilities (debts with banks in Uruguay), and is fixed by assessment by the General Real Estate Registry.

CORPORATE TAXATION

INCOME TAX (Impuesto a las Rentas de la Industria y Comercio)

Companies earning Uruguayan-sourced income and capital gains are subject to corporate income tax at a flat rate of 25%. The taxable income is computed by deducting income-generating expenses from the gross income. Other allowable deductions include advertising costs, bad debts, commissions, gifts, goodwill, guaranties, interest expense, rents, representation expenses, research and development, remuneration (to owners, partners, directors), royalties and technical assistance, salaries and wages, service fees, social welfare, taxes on income-generating assets and activities, training costs, travel expenses, and depreciation expenses.

BUSINESS NET WORTH TAX (Impuesto al Patrimonio, IAP)

The tax base for this tax is computed by deducting the company’s total liabilities from its total assets. The tax rates vary from 1.5% to 3.5%, depending on the taxpayer’s classification and the type of assets involved. The standard tax rate is 1.5%.

PROPERTY TAX

Property Tax (Contribución Imobiliaria)

Property tax for is levied on immovable properties in Uruguay, payable by the owners. The tax base is the cadastral value of the property as determined by the Cadastral Bureau. The tax rates vary from 0.15% to 0.30%, depending on the property value.

Uruguay - more data and information

• Guide to buying houses and registering property sales in Uruguay

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