Uruguayan Government regulates tax measures affecting foreign IT professionals

Local contact

EY Global

22 Nov 2023
Subject Tax Alert
Jurisdictions Uruguay
  • A new Executive Office Decree regulates an employment tax option provided to professionals of the information technology (IT) sector.
  • An employee's decision to decline the option is irrevocable.
  • Employers are responsible for monitoring and providing evidence of compliance when asked to do so by the Tax Authority or Social Security Bank.

The Executive Office issued Decree No. 360/023 on 14 November 2023, providing rules governing Law No. 20,191 as it applies to professionals in the information technology (IT) sector.

Law No. 20,191 gives IT professionals the option to pay the Non-Resident Income Tax (IRNR) for income obtained in Uruguayan territory under employment contracts. For more information, see EY Global Tax Alert, Uruguay enacts new initiative to attract IT professionals using tax incentives, dated 11 September 2023.

According to Decree 360/023:

  • The option must be presented in writing at the beginning of the employment relationship through a tax return from the worker to the employer. If the employee decides to renounce the option, that decision will be considered irrevocable and will apply from the year in which it is made. It must also be expressed in writing.
  • The Uruguayan employer entity is required to withhold nonresident income tax at the rate of 12% of the nominal value of the tax base salary and remit it to the tax administration in the month following the accreditation or payment of the income.
  • The employer is responsible for monitoring and providing evidence of compliance under the conditions specified in Law No. 20,191, when asked to do so by the Tax Authority or Social Security Bank, both at the beginning of the employment relationship and during the calendar year in which the employee benefits from the option.
  • If noncompliance is verified, the taxes owed plus fines and surcharges must be paid from the fiscal year in which noncompliance was detected.

The Decree No. 360/023 is pending of publication in the Official Gazette and will be effective from publication. It can be accessed here (pdf) (only in Spanish).


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

EY Uruguay, Montevideo
  • Rodrigo Barrios
  • María Inés Eibe
  • Piero de los Santos
  • Lucia Giagnacovo
Ernst & Young LLP (United States), Latin American Business Center, New York
  • Lucas Moreno
  • Ana Mingramm
  • Pablo Wejcman
  • Enrique Perez Grovas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
  • Lourdes Libreros
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
  • Raul Moreno, Tokyo
  • Luis Coronado, Singapore

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

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