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Offshore indirect transfers: when selling a foreign holding is taxed in Uruguay

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Last verified: 2026-10-27 · Status: Changing

Since 2026 a sale of shares in a foreign entity is taxed in Uruguay when, at any point in the prior 365 days, more than half its assets are in Uruguay, or its Uruguayan assets exceed UI 31,500,000 and the sale moves more than half of them. Only the Uruguayan share of the gain is taxed, at the 12 percent IRNR rate (or under IRAE for IRAE taxpayers), with Uruguayan subsidiaries valued on their underlying Uruguayan assets. Intra group transfers with identical ultimate owners keeping 95 percent of their proportions for two years are excluded; otherwise the foreign seller must register a representative and pay.

USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026. UI amounts use UYU 6.6792 per UI, the BCU quotation for 27 October 2026. Both were retrieved from the BCU quotations service on the verification date; conversions are for orientation only.

Key facts

Uruguayan asset value test for offshore share sales	31500000 UIT.O. 2023 Title 8 art. 7 numeral 3) (Ley 20.446 art. 658), as of 2026-10-27 · in force
Share of assets located in Uruguay that triggers the rule	50 % (more than)T.O. 2023 Title 8 art. 7 numeral 3) literal a), as of 2026-10-27 · in force
Look back period for the offshore share sale tests	365 daysT.O. 2023 Title 8 art. 7 numeral 3), as of 2026-10-27 · in force
IRNR rate on the Uruguayan share of an offshore share sale gain	12 %T.O. 2023 Title 8 art. 18 literal B), as of 2026-10-27 · in force
Holding period for the same owner exclusion	2 yearsT.O. 2023 Title 8 art. 7 numeral 3), as of 2026-10-27 · in force
Minimum preserved ownership proportion for the exclusion	95 %T.O. 2023 Title 8 art. 7 numeral 3), as of 2026-10-27 · in force

The rule

1. The transfer of shares or other equity interests in a non resident entity, and the creation or assignment of a usufruct over them, is Uruguayan source income taxed by IRNR when, at any time during the 365 days before the transfer, either (a) more than 50 percent of the entity's assets consist, directly or indirectly, of assets located in Uruguay, or (b) those Uruguayan assets exceed UI 31,500,000 and the transfer represents the direct or indirect transfer of more than 50 percent of them. Where related entities sell, the 50 percent is measured on the sum of their transfers.
Cost to do it: IRNR at 12 percent (Title 8 art. 18 literal B)) on the Uruguayan source part of the gain.
Example: UI 31,500,000 is about UYU 210,394,800. / About US$5,231,879 at the rates in the FX note.Texto Ordenado 2023 (DGI), Title 8 IRNR, as amended by Ley Nº 20.446 of 16 December 2025, Title 8 art. 7, second paragraph, numeral 3) (substituted by Ley 20.446 art. 658), 2026-01-08 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 658 (Diario Oficial 8 January 2026) substituted numeral 3), introducing the 365 day look back, the more than 50 percent asset test and the UI 31,500,000 value test with the more than 50 percent transfer condition and related seller aggregation.

2. Only part of the gain is Uruguayan source: the ratio of the entity's assets located in Uruguay to its total assets. Assets are valued under the IRAE valuation rules (the regulation may set specific ones), and where the Uruguayan assets are shares of Uruguayan resident entities they are valued only by the underlying assets located in Uruguay that those entities own directly or indirectly.
Cost to do it: 12 percent of the apportioned gain.
Example: If the gain on the offshore sale is UYU 160,856,000 and 60 percent of the holding's assets are Uruguayan, the Uruguayan source gain is UYU 96,513,600 and IRNR is UYU 11,581,632. / US$4,000,000 gain x 60 percent = US$2,400,000; IRNR US$288,000.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 7 numeral 3), third to fifth paragraphs, 2026-01-08 official text · verified 2026-10-27

3. The rule does not apply to share transfers where the ultimate owners of seller and buyer are entirely the same, keep at least 95 percent of their proportions unchanged for at least two years from the effective transfer, and the buyer keeps the shares for at least two years; nor to mergers and spin offs whose ultimate owners are entirely the same, keep 95 percent of their proportions and do not change them for two years from the operation. Changes caused by inheritance, partition of an estate or dissolution of a marital partnership do not break the test.
Cost to do it: No IRNR if the exclusion conditions hold for the two year period.
Example: A group moving its Uruguayan holding from one wholly owned offshore company to another keeps the exclusion only if neither the ownership nor the holding changes for two years. / Same test regardless of value.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 7 numeral 3), final paragraph, 2026-01-08 official text · verified 2026-10-27

4. The same indirect transfer rule exists for IRAE, so a seller that is an IRAE taxpayer (for example a Uruguayan company or a foreign entity with a permanent establishment in Uruguay) includes the Uruguayan source portion of such a gain in its IRAE base instead of paying IRNR.
Cost to do it: IRAE at the general rate on the apportioned gain.
Example: A Uruguayan holding company selling a foreign subsidiary whose assets are mostly in Uruguay applies the same 50 percent and UI 31,500,000 tests. / Same thresholds in US dollar terms.Texto Ordenado 2023 (DGI), Title 4 IRAE, as amended by Ley Nº 20.446, Title 4 art. 16, second paragraph, numeral 5) (substituted by Ley 20.446 art. 644), 2026-01-08 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 644 (Diario Oficial 8 January 2026) substituted numeral 5) of Title 4 art. 16 in parallel with the IRNR change.

5. A foreign seller with no Uruguayan withholding on this income must appoint a person resident in Uruguay to represent it before the DGI when it starts earning Uruguayan source income, and settles IRNR annually with a 31 December close.
Cost to do it: Representative and adviser fees are agreed privately.
Example: The offshore seller registers and files in Uruguay even though neither party to the share sale is Uruguayan. / Same obligation whatever the deal value.Decreto Nº 149/007 (IRNR regulation), Art. 18 and art. 24, 2007-04-26 official text · verified 2026-10-27

Test	Condition	Measured
Asset test	More than 50 percent of the entity's assets are directly or indirectly in Uruguay	At any time in the 365 days before transfer
Value test	Uruguayan assets above UI 31,500,000 and the deal transfers more than 50 percent of them	Same 365 day window; related sellers aggregated
Tax base	Gain x (Uruguayan assets / total assets)	IRAE valuation rules
Exclusion	Same ultimate owners, 95 percent proportions kept, two year holding	Two years after transfer or operation

Is an offshore sale caught? (T.O. 2023 Title 8 art. 7 numeral 3), as substituted by Ley 20.446 art. 658)

Worked example

An offshore holding is sold for a gain of US$4,000,000 (UYU 160,856,000); 60 percent of its assets are a Uruguayan subsidiary. Uruguayan source gain US$2,400,000 (UYU 96,513,600); IRNR at 12 percent US$288,000 (UYU 11,581,632).
A holding whose Uruguayan assets are 30 percent of its total but worth UI 40,000,000 (about US$6,643,656) is caught if the sale transfers more than half of those Uruguayan assets.

Step by step

Map the group's Uruguayan assets and their IRAE values at every point in the 365 days before signing.
Apply the asset test and the value test; aggregate sales by related sellers.
Check the same owner exclusion for internal reorganizations and diarize the two year holding period.
If caught, compute the apportioned gain, appoint a Uruguayan representative and file and pay IRNR (Decreto 149/007 art. 18 and 24).
Check whether a treaty with the seller's residence country limits Uruguay's right to tax the gain.

Common traps

Stripping assets out of the holding shortly before the sale does not help: the tests look at any moment in the previous 365 days.
The exclusion falls away if ownership or the holding changes within two years, so a later third party sale can revive the tax on the earlier internal transfer.
Uruguayan subsidiaries are valued on their underlying Uruguayan assets, not their book equity, so leverage in the subsidiary does not reduce the asset test.
From 2026 the IRAE rule (Title 4 art. 16 numeral 5)) mirrors the IRNR rule, so Uruguayan holding companies selling foreign subsidiaries are also caught.

Sources

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