Expatriate tax ebook - Uruguay

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates

Pre arrival procedures
There are no work restrictions for foreigners in our country. Foreigners must obtain legal residence in Uruguay and health certificate in order to be apt for work.

There are no work restrictions for foreigners in our country. Foreigners must obtain legal residence in Uruguay and health certificate in order to be apt for work.

Citizens from the majority of the western countries have free access to our country and they do not need a visa.

To obtain legal residence, the individual shall present certain documentation, for example, birth certificate, clean record document, etc., and he should enter the country as a tourist in order to start performing all legal acts, for example the obtaining of a good health certificate until his presentation before Migration Authorities.

For the case of families, each member should apply for legal residence.

Legal residents may bring their personal belongings and those needed to furnish the house, tax-free. In order to enter those belongings, a transporting company should be retained in the country of origin, which together with a similar company in Uruguay will perform all corresponding acts before the Customs of each country. Motorized vehicles are forbidden.

Employment visas
Any person entering the country legally (even as a tourist) is able to apply for permanent residence and to start working immediately, even while the authorization is still pending (it takes approx. three months).

Tax returns and compliance
When a person starts working as dependent in a Uruguayan company, the employer is obliged to tell the public agencies, and to furnish all supplementary information requested by such agencies, so that the person may enter the Uruguayan Social Security System.

The employer is also obliged to withhold the personal monthly contributions and the corresponding Personal Income Tax on Residents (IRPF).

In case the employee has only one job in Uruguay and he does not receive other income whatsoever in Uruguay, no further information shall be necessary since the information furnished by the employer shall suffice.

In case the employee had more than just one job or had other income subject to income tax, the person would have to file an affidavit and annual settlement, and would have to make advance payments if applicable (depending on the income nature). The affidavit should be filed on a date to be determined by Tax Authorities (DGI), the year following the one the income was generated (usually between May and July).

Legally recognized marriages or concubines could opt to determine IRPF considering the income obtained by the couple considered jointly. Differential rate scales will apply on this case depending on the earnings of each member of the couple.

Lastly, it should be determined whether the person should pay General Property Tax (“Impuesto al Patrimonio”). There is a non-taxable minimum. If the person exceed such minimum it will be obliged to register and in such case an affidavit and tax settlement will have to be filed. Such affidavit must be filed in May, annually and payments in advance during the following fiscal year will be required.

Tax year
The tax year for individuals starts the very moment they obtain taxed income and it ends every December 31.

Income tax rates - Income arising from the work factor
In order to calculate the positive IRPF all incomes should be added and the following rates scale should be applied to such amount:

As we mentioned previously, legally marriages and concubines could opt to determine their IRPF considering the income generated by the couple jointly. If this alternative is chosen, different rates scales will apply considering the earnings of each member.

If the annual earnings of each member exceed 12 National Minimum Salaries ($ 72.000) (approx. USD 4.000) the rates applicable will be the followings:

Over 168 BPC and up to 180 BPC ($ 400.680) (approx. US$ 22.260)

If the annual earnings of one member of the couple does not exceed 12 National Minimum Salaries the rates applicable will be the followings:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities