Uruguay modifies “tax holiday” regime

Local contact

EY Global

11 Feb 2021 PDF
Subject Tax Alert
Categories Corporate Tax
Jurisdictions Uruguay

In the last few months of 2020, Uruguay modified the “tax holiday” regime, which provides a temporary income tax exemption to new tax residents for income from foreign investments. Law No. 19,904 (September 2020) allows new tax residents to choose between:

  •  Not being subject to income tax on yields of foreign capital for the year in which they became tax residents and the following 10 years (previously it was 5 years)

  •  Being subject to a 7% rate forever on yields of foreign capital

Once the election is made, it will apply from 2020 and thereafter.

Law No. 19,937 (December 2020) extended the “10-year period” option to tax residents who benefited from the regime before 2020. To qualify for the 10-year period, individuals must meet the following conditions:

  • Prove they acquired property for a value exceeding 3.5 million Indexed Units (approx. US$400,000) as from 22 January 2021

  • Be in Uruguay for at least 60 days during the calendar year

For additional information with respect to this Alert, please contact the following:

Ernst & Young Uruguay, Montevideo
  • Martha Roca
  • María Inés Eibe
  • Nadine Bruck
Ernst & Young LLP (United States), Latin American Business Center, New York
  • Ana Mingramm
  • Pablo Wejcman
  • Enrique Perez Grovas
Ernst & Young Abogados, Latin American Business Center, Madrid
  • Jaime Vargas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
  • Lourdes Libreros
Ernst & Young Tax Co., Latin America Tax Desk, Japan & Asia Pacific
  • Raul Moreno, Tokyo
  • Luis Coronado, Singapore

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.