Tax In Uruguay

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Uruguay is complying with the country’s tax system. As well as paying tax in Uruguay, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Uruguay under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Uruguay for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Uruguay, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Uruguay through PAYE is left with the prospect doing everything themselves.

Do you know much about Uruguayan Tax Law? Does Uruguay have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Uruguay can range from 10 to 36 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Uruguay, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Uruguay are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Uruguayan umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Uruguayan taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Uruguayan tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Uruguay, many of whom are experts in tax and immigration laws. If you have any questions about tax in Uruguay, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Uruguayan work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Uruguay but without the overhead of directly dealing with the Uruguayan tax authorities. Get in touch with us today for some reliable advice on tax in Uruguay!

When Do You Need to Lodge Your Tax Return?:
30 April (of the year following the income tax year)
Tax Filing Deadline :
30 April (of the year following the income tax year)
Can you file it online? :
Yes, https://servicios.dgi.gub.uy/ServiciosEnLinea/PrincipalServiciosEnLinea
Currency:
Uruguayan Peso (UYU)
Tax-free Threshold in:
UYU323,232
Grossed Income:
0 – 323,232
Tax Rate:
0%
Grossed Income:
>323,232 – 461,760
Tax Rate:
10%
Grossed Income:
>461,760 – 692,640
Tax Rate:
15%
Grossed Income:
>692,640 – 1,385,280
Tax Rate:
24%
Grossed Income:
>1,385,280 – 2,308,800
Tax Rate:
25%
Grossed Income:
>2,308,800 – 3,463,200
Tax Rate:
27%
Grossed Income:
>3,463,200 – 5,310,240
Tax Rate:
31%
Grossed Income:
>5,310,240
Tax Rate:
36%
How long does it take to set up:
6.5 days
How much does it cost:
UYU88,780 + 0.5% of capital + notary tax (15.5%) + bank deposit (approx. USD200)
Is it easy? :
Starting a Business Rank: 61/190 (Source: World Bank)
How to File Taxes in:

An individual is only required to file taxes if they have more than 1 source of employment income.

You can file taxes on the Uruguayan tax authority (Dirección General Impositiva) website.

Step 1: Register

Register here(link is external) for a Username and Password to access online services.

Step 2: Sign In

Access online services by signing in here(link is external). Alternatively, you can sign in using an Electronic Identity Card.

Step 3: File Taxes Online

You will now be able to file your taxes online.

Notes:

The tax rates included in the table above apply to resident taxpayers only.

Calculating Income Tax as a Family Unit: Income tax can also be levied according to the gross income of a family unit. If each member earns more than 12 minimal salaries (1 minimal salary = UYU13,430), the following tax rates apply to the total gross taxable income of that family.

Annual Taxable Gross Income (UYU)Tax Rate (%)
0 – 646,4640
>646,464 – 692,64015
>692,640 – 1,385,28024
>1,385,280 – 2,308,80025
>2,308,800 – 3,463,20027
>3,463,200 – 5,310,24031
>5,310,24036

If each member earns less than 12 minimal salaries, the following tax rates apply to the total gross taxable income of that family.

Annual Taxable Gross Income (UYU)Tax Rate (%)
0 – 369,4080
>369,408 – 554,11210
>554,112 – 692,64015
>692,640 – 1,385,28024
>1,385,280 – 2,308,80025
>2,308,800 – 3,463,20027
>3,463,200 – 5,310,24031
>5,310,24036

Income Tax on Non-Resident Individuals: Non-resident individuals are subject to a 12% tax rate on employment income.

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

You become a tax resident in Uruguay when:

  • You are present in Uruguay for at least 183 days;
  • Your centre of economic or vital interests is in Uruguay (which is met when your spouse and dependent underage children habitually reside in Uruguay);
  • Your centre of economic interests is in Uruguay (which is met when you derive more income from Uruguay than any other country, excluding passive income); or
  • You have an investment in Uruguay which complies with 1 of the following requirements:
    • More than 15 million ‘index units’ (approx. UYU173,943,000) in Uruguayan properties;
    • More than 45 million ‘index units’ (approx. UYU173,943,000) in a company with projects or activities promoted by the Inversions Law, directly or indirectly.
Am I taxed on my global income in:

Both residents and non-residents are subject to Uruguay-source income only.

Residents are also taxed on holding income derived from loans, deposits and capital investments in non-resident entities (not including capital gains derived from the sale of an investment or rental income). A tax credit is available for taxes paid abroad on globally sourced holding income.

 

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