In short (2026 rules):
Contents
The tax holiday is Uruguay’s main tax incentive for new residents, and Budget Law 20.446 changed it significantly from 2026. This guide explains how the Uruguay tax holiday works, which income it exempts, the 2026 conditions, what happens when it ends and how it compares with the impatriate regime for people moving to work. For tax residency itself, see Uruguay tax residency.
Uruguayan tax residents pay IRPF on certain foreign investment income. The tax holiday is an election available to new tax residents: instead of IRPF, they can opt for non-resident income tax treatment, which does not tax that income. In practice it is exempt for the year residency is acquired and the following 10 years.
| Income | Covered? |
|---|---|
| Foreign dividends and interest | Yes |
| Foreign rental income (taxed since 2026) | Yes |
| Capital gains on foreign assets (taxed since 2026) | Yes |
| Uruguayan-source income | No |
| Salary for work done in Uruguay, including remote work for foreign employers | No |
| Foreign pensions | Not needed: not taxed |
| Condition | Threshold | Approx. USD |
|---|---|---|
| Physical presence | More than 183 days per calendar year | — |
| Real estate investment | Over UI 12,500,000 | 2 million |
| Productive or innovation funds | Over UI 625,000 per year | 100,000 a year |
| Direct business investment | Expanding productive capacity, per Decree 188/026 | — |
The condition must be met and kept every year. The holiday is for new residents: former Uruguayan tax residents cannot restart it. See tax residency by investment.
Anyone who became resident and elected the regime by 31 December 2025 keeps it for the original term, including for income newly taxed in 2026. Those who chose the indefinite 7% IRPF alternative available since 2020 also keep it.
The tax holiday is for investment income. For people moving to work, Law 20.446 (Articles 190–192) created a qualified-talent program: professionals who lived abroad and join innovation, technology or global-services companies can opt to pay 12% non-resident income tax on their salary instead of progressive IRPF, and opt out of Uruguayan social security. Main conditions: no Uruguayan tax residency in the previous 5 years, presence of at least two thirds of the year and employment income only from work in Uruguay. It lasts for the year of arrival and the next four; its exact scope depends on the regulations.
The year you become a tax resident plus the next 10: 11 tax years.
Yes, but new residents must keep 183 days of presence or a qualifying investment.
No. It covers foreign investment income. Salaries may qualify for the qualified-talent regime instead.
It doesn’t need to: foreign pensions are not taxed in Uruguay.
At GlobalTax we set your residency date, the best condition to meet and your exit from your home country, and support you through the whole period, in English, Spanish or Portuguese. Contact us.
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