Does Uruguay Tax Foreign Income? Taxes for Residents

One of the first questions people ask before moving to Uruguay is how their income and assets abroad will be taxed. The answer changed in 2026 with Budget Law 20.446, which widened the foreign income in scope. This guide explains Uruguay’s tax on foreign income for residents: what is taxed, at what rate, how it is paid and when the new-resident exemption applies. To check whether you are a tax resident, see Uruguay tax residency.

Does Uruguay tax foreign income?

The general rule is territoriality: Uruguay taxes Uruguayan-source income, from activities carried out, assets located and rights used in the country. The exception is that tax residents pay IRPF on some foreign investment income. Work performed outside Uruguay remains out of scope, but remote work performed from Uruguay is Uruguayan-source income.

Who pays: residents and non-residents

• Tax residents pay IRPF on Uruguayan income and on foreign investment income in scope. You are a tax resident, for example, if you spend more than 183 days in Uruguay in a calendar year.
• Non-residents pay non-resident income tax (IRNR) only on Uruguayan-source income.

Legal residency does not automatically make you a tax resident.

Taxes in Uruguay for foreigners, by type of income

Income	Taxed in Uruguay?	Rate
Salaries and fees for work done in Uruguay	Yes	Progressive IRPF, 0% to 36%
Remote work done from Uruguay for foreign employers or clients	Yes (Uruguayan source)	Progressive IRPF
Work performed outside Uruguay; foreign pensions (incl. US Social Security)	No	—
Foreign dividends	Yes	12%
Foreign interest	Yes	12%
Rental income from property abroad	Yes, since 2026	12%
Capital gains on foreign assets	Yes, since 2026	12%, or deemed-income option
Income through non-resident entities	Yes, since 2026	12%
Foreign royalties, patents, trademarks and image rights	No	—

What changed in 2026 (Law 20.446)

Since 2011, tax residents had paid tax on foreign dividends and interest. From 1 January 2026, Law 20.446 added foreign capital gains, foreign rental income and income earned through non-resident entities, and changed the tax holiday for people becoming resident from 2026. See Uruguay residency news.

How it is paid: 12%, 8% final or deemed income

• General rule: 12%, in the annual IRPF return.
• 8% final rate: if a licensed Uruguayan financial intermediary holds the assets and withholds the tax, the rate is 8% and you don’t need to report that income.
• Deemed income for capital gains: instead of the actual gain, you can treat 20% of the sale price as income (2.4% effective), or 15% for real estate (1.8% effective).
• Assets you already owned: for assets acquired before 31 December 2025, their value at that date is the cost basis, so pre-reform gains are not taxed.

Exemption for new residents (tax holiday)

New tax residents can elect not to pay IRPF on foreign investment income for the year they become resident and the next 10. Since 2026 this requires meeting and keeping a condition: more than 183 days a year in Uruguay, real estate over UI 12,500,000 (about USD 2 million), over UI 625,000 a year in productive or innovation funds, or direct investment in a company. Those who elected the regime by 31 December 2025 keep it, including for income newly taxed in 2026.

Wealth tax: only assets in Uruguay

Uruguay’s net wealth tax for individuals is also territorial: it applies to assets located in Uruguay (real estate, vehicles, deposits in Uruguayan banks and others) above a tax-free threshold. Assets held abroad are not included.

Examples by profile

Profile	Uruguayan tax
US retiree living on Social Security and a pension	None on the pensions. Dividends or interest abroad: 12%, unless under the tax holiday. See Uruguay retirement visa.
Remote worker living in Uruguay, employed abroad	IRPF on the salary, because the work is done in Uruguay (DGI ruling 6639/2024), plus social security contributions; the tax holiday does not cover it. See digital nomad taxes.
Investor with a foreign brokerage account	12% on dividends, interest and gains, or exempt under the tax holiday; 8% final with a Uruguayan custodian.

US citizens remain subject to US tax on worldwide income, and there is no comprehensive US–Uruguay income tax treaty, so plan both sides with foreign tax credits in mind.

FAQ

How much will you pay in Uruguay?

At GlobalTax we review your foreign income and assets, choose the most efficient way to pay and plan the tax holiday before you move, in English, Spanish or Portuguese. Contact us.