Global Daily Tax Update

 Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

February 11, 2021
2021-5174

Uruguay modifies “tax holiday” regime

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
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young Abogados, Latin American Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin America Tax Desk, Japan & Asia Pacific
 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2021, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct