In Uruguay, an individual is considered a fiscal resident if they meet one of the following conditions:
- They reside in the country for 183 or more days in a calendar year.
- They have a permanent home in the country, even if they spend less than 183 days in the country.
- They carry out an economic activity in the country, regardless of the number of days spent in the country.
For non-residents, only income derived from sources within Uruguay is subject to taxation. Additionally, Uruguayan tax law recognizes some tax treaties with other countries to avoid double taxation.
In Uruguay, an individual carrying out an “economic activity” refers to individuals who are involved in any commercial, industrial, agricultural, or professional business or enterprise. This includes self-employment or work as an independent contractor, as well as employment with a company based in Uruguay. The type of economic activity does not have to be the individual’s main source of income, but it must be regular and continuous.
Renting out agricultural land in Uruguay could be considered an “economic activity” for the purpose of determining fiscal residency. In order to be considered a fiscal resident based on carrying out an economic activity, an individual must be involved in any commercial, industrial, agricultural, or professional business or enterprise, including rental activities.
If an individual rents out agricultural land in a systematic and continuous manner in Uruguay, they may be considered a fiscal resident, regardless of the number of days spent in the country. In this case, the individual’s rental income from the agricultural land would be subject to Uruguayan taxation as income derived from sources within the country.
Economic interests: An investment in Uruguay that has any of the following characteristics:
- Properties with a value of over USD 1,500,000 USD.
- Direct or indirect interests in a company, with a value of over 5,000,000 USD, related to activities or projects that have been declared of national interest.
- Properties with a value of over USD 370,000, acquired after 1 July 2020, together with an effective presence in Uruguay of at least 60 days during the calendar year.
- Direct or indirect investment in a company for over 1,600,000 USD, made after 1 July 2020; this investment must create at least 15 new direct, full-time jobs with employee status during the calendar year.
In short: either IRNR [Income Tax for Non-Residents] taxation for 10 years, which means that no taxes are paid for this income from abroad during this term; or IRPF taxation with a reduction in the ratio applicable to income for return on movable capital from abroad (from 12% to 7%).
Important is also that you need to give up fiscal residency in country of origin.
In case of interest, we can connect you with the specialists.
