CHANGES TO THE URUGUAY TAX REGIME ๐บ๐พ
With the latest legislative change, here are some of the positive and negative changes from the Uruguayan tax residency and tax holiday regime in 2026
NEGATIVE:
- DECOUPLING of the tax holiday and tax residency requirements: The option of investing ~590k and staying 60 days in Uruguay is only available now for tax residency, but not for the tax holiday. Meaning you would be a tax resident without the exemption on foreign capital gains, dividends, rentals and interest for 11 years.
- Foreign-sourced capital gains and rentals, which were previously tax-free forever, are now also taxed at the 12% regular rate. Those on the tax holiday can keep the exemption
POSITIVE
- Besides 183 days in-country and 2 million USD Real Estate investment, there is now a 3rd option to obtain the tax holiday: Invest 100k USD yearly into a Uruguayan research and innovation fund, to be structured by the Uruguayan public administration
- Introduction of a transition regime after the 11 years are over. Now, residents will have the option of choosing between 2 regimes: 300k USD flat tax for 20 years, or a 50% tax reduction on foreign incomes (6% effective rate) for an additional 5 years. For the latter option, the person must invest another 1 million USD in real estate or continue investing 100k per year into the Uruguayan funds.
Noteworthy here: Uruguay can NO LONGER be considered a territorial tax-country!
Pre-2011, foreign sourced passive incomes were fully exempt for all residents under a truly territorial regime
Since 2011, "mobile capital" incomes, namely dividends and interest, were added as exceptions that were taxed even if foreign sourced. The tax holiday exempted them for new residents.
As of 2026, dividends, interest, capital gains and rentals are all taxed on a worldwide basis, with the exception for those on the tax holiday program
The country is now better qualified as a worldwide taxation country WITH a special temporary tax regime, as Portugal, Italy and Spain.