Uruguay — Taxes

A tax holiday, then a moderate system Uruguay’s draw is a ten-year exemption on foreign-source income for new tax residents, reshaped by the 2026 reform (Law 20.446). During it, foreign dividends, interest, royalties and capital gains are not taxed by Uruguay. It is a holiday, not a permanent zero — plan for what comes after.

After the holiday Once the exemption ends, Uruguay taxes foreign financial income at a flat 12% (raised in the 2026 reform), while Uruguay-source income is taxed progressively under IRPF, up to 36%. Corporate income tax is 25% and VAT is a high 22%.

Wealth is taxed, inheritance is not Uruguay levies a net wealth tax (Impuesto al Patrimonio) on assets located in Uruguay above a threshold — something the Caribbean and Gulf options do not. There is, however, no inheritance tax.

Residency, tax residence and a passport that rewards presence Legal residency needs no minimum investment, and holding it does not automatically make you tax-resident — nor does it remove obligations to a country that taxes on citizenship, such as the United States. Uruguay’s real trade is stability and a strong passport in exchange for actually living there: citizenship in three to five years, but a long absence can reset the clock. Weigh it against the lighter-touch territorial options of Paraguay and Panama, read our tax hub and residency hub, and see how each figure is checked in our methodology.