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Dividends and profit repatriation from Uruguay: distributable profits, 7 percent IRNR, branch remittances and the 2026 changes

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

Profits leave Uruguay freely: Ley Nº 16.906 guarantees the transfer abroad of profits in freely convertible currency, with no FX permit, registration or waiting period. The company law limits what can be paid (only realized net profits from an approved balance sheet, after the 5 percent legal reserve and past losses) and S.A.s must pay at least 20 percent of each year's net profit unless 75 percent of capital waives it. The tax cost is IRNR at 7 percent withheld on dividends out of IRAE taxed profits; since 1 January 2026 dividends out of untaxed profits paid to foreign parents that get a home credit are also taxed, and Decreto Nº 255/026 (published 26 October 2026) caps that tax at the foreign credit and allows a refund when the credit cannot be used.

USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026, retrieved from the BCU quotations service on 27 October 2026. Amounts in Unidades Indexadas (UI) use UYU 6.6516 per UI (BCU quotation for 1 October 2026) where the norm fixes the UI of the first day of the month, and UYU 6.6792 per UI (27 October 2026) otherwise. Conversions are for orientation only.

Key facts

Access to FX to pay dividends abroad	Free transfer guaranteed by law, no prior authorization Ley Nº 16.906 art. 5, as of 2026-10-27 · in force
IRNR on dividends paid abroad out of IRAE taxed profits	7 %T.O. 2023 Title 8 art. 18 B), as of 2026-10-27 · in force
IRNR on branch profit remittances out of IRAE taxed income	7 %Decreto Nº 149/007 art. 6; T.O. 2023 Title 8 art. 18 B), as of 2026-10-27 · in force
Annual allocation to legal reserve	5 % of net profit until 20% of capitalLey Nº 16.060 art. 93, as of 2026-10-27 · in force
Mandatory minimum dividend in an S.A.	20 % of net profit (waivable by 75% of capital)Ley Nº 16.060 art. 320, as of 2026-10-27 · in force
Deadline to pay an approved dividend	90 daysLey Nº 16.060 art. 99, as of 2026-10-27 · in force
Age of undistributed taxed profit that triggers a deemed dividend	3 fiscal yearsT.O. 2023 Title 8 art. 14, as of 2026-10-27 · in force

The rule

1. The State guarantees the free transfer abroad of capital and profits and of other sums linked to the investment, in freely convertible currency, and foreign investors get the same treatment as nationals. No FX authorization, registration or central bank approval is needed to pay a dividend or remit branch profits.
Cost to do it: No public fee; the paying bank's transfer charge and FX spread apply.
Example: A dividend of UYU 4,021,400 can be converted and wired abroad on the day it is due, with no permit. / About US$100,000, remitted without FX approval.Ley Nº 16.906 (Investment Law), Art. 2 and art. 5, 1998-01-07 official text · verified 2026-10-27

2. Only benefits derived from net profits shown in a balance sheet regularly prepared and approved by the competent corporate body can be distributed, and profits cannot be distributed until prior years' losses are covered and the legal reserve is restored. Every company must allocate at least 5 percent of each year's net profit to the legal reserve until it reaches 20 percent of share capital. Dividends paid in breach must be returned, except dividends received in good faith by shareholders of an S.A.
Cost to do it: Internal approval cost only (shareholders' meeting minutes and approved financial statements); professional fees vary.
Example: A company with UYU 10,000,000 of net profit and a legal reserve below 20 percent of capital must set aside at least UYU 500,000 before distributing. / Net profit about US$248,670; at least about US$12,433 goes to the legal reserve.Ley Nº 16.060 (Commercial Companies Law), Art. 93 and art. 98 (art. 98 as worded by Ley Nº 19.924 art. 721), 1989-09-04 official text · verified 2026-10-27

3. In an S.A., at least 20 percent of each year's net profit must be distributed as a dividend, and shareholders can demand that part in money. The obligation does not apply if the shareholders' meeting resolves otherwise with a reasoned resolution backed by shareholders holding at least 75 percent of capital (and the statutory auditor's favourable opinion, if there is one), or to profits needed to restore the legal reserve or cover past losses. Approved dividends must be paid within 90 days of the resolution, and interim dividends are allowed when free reserves or an interim balance sheet support them.
Cost to do it: No fee; a reasoned 75 percent resolution is needed to retain the whole profit.
Example: On UYU 10,000,000 of net profit, minority shareholders can demand a dividend of at least UYU 2,000,000 unless 75 percent of capital votes to retain it. / Minimum dividend about US$49,734 on about US$248,670 of profit.Ley Nº 16.060 (Commercial Companies Law), Art. 99, art. 100 and art. 320, 1989-09-04 official text · verified 2026-10-27

4. Dividends and profits paid or credited abroad by IRAE taxpayers out of IRAE taxed income, and deemed dividends, bear IRNR at 7 percent. The 25 percent rate for low or no tax jurisdictions does not apply to dividends paid by IRAE taxpayers. Dividends on shares listed on a Uruguayan stock exchange are exempt. The IRAE taxpayer paying the dividend is the withholding agent and withholds when it pays or credits the dividend.
Cost to do it: 7 percent of the gross dividend, withheld at source; a treaty may reduce it (see taxes/tax-treaties).
Example: UYU 4,021,400 dividend: IRNR UYU 281,498, net UYU 3,739,902. / US$100,000 dividend: US$7,000 withheld, US$93,000 received.Texto Ordenado 2023 (DGI), Title 8 IRNR; Decreto Nº 149/007 (IRNR regulation), Title 8 art. 18 literal B) and art. 19 literal C); Decreto 149/007 art. 34 literal d) and art. 35, 2022-10-20 official text · verified 2026-10-27

5. From 1 January 2026, dividends distributed by Uruguayan companies (the entities in Title 4 art. 12 literal A numerals 1 to 8) are also taxed, regardless of the tax treatment of the income they come from, when the dividend is taxed in the beneficiary's country of residence and that country grants a credit for the Uruguayan tax; the rule does not apply when the beneficiary cannot use the credit because it had negative taxable income. Decreto Nº 255/026 regulates it: it applies to distributions made from 1 January 2026 for the amount exceeding the dividend already taxed as coming from IRAE taxed income, the total IRNR cannot exceed the credit granted in the beneficiary's country, withholding applies even when the profit was already attributed under a foreign controlled company regime, and the tax withheld is refunded when the beneficiary proves it could not credit it.
Cost to do it: 7 percent of the dividend, limited to the foreign credit; refundable if the credit cannot be used.
Example: A UYU 4,021,400 dividend out of exempt income paid to a parent whose country taxes it and credits Uruguayan tax bears UYU 281,498 of IRNR; paid to a parent whose country exempts dividends, it stays free of IRNR. / US$100,000 dividend: US$7,000 IRNR if the parent gets a home credit, zero otherwise.Ley Nº 20.446 (2025 to 2029 Budget Law), art. 657, rewording T.O. 2023 Title 8 art. 19 literal C); Decreto Nº 255/026, Title 8 art. 19 literal C) ii); Decreto 149/007 art. 6, art. 7, art. 22 and art. 34 literal d) as worded by Decreto 255/026 art. 1 to 5, 2026-10-01 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 657 (in force 1 January 2026) narrowed the exemption for dividends out of income not taxed by IRAE. Decreto Nº 255/026, promulgated 1 October 2026 and published 26 October 2026, reworded Decreto Nº 149/007 art. 6, 7, 22 and 34 to apply it: tax capped at the foreign credit, withholding even under foreign controlled company rules, and refund when the credit cannot be used.

6. Branch profits remitted by a permanent establishment of a non resident to its head office or other branches are taxed as profits distributed, and for branches the distribution is deemed made when the remittance or credit takes place (for companies, when the competent body resolves the distribution). Exchange differences on capital contribution and withdrawal accounts and financial operations between a branch and its head office are not treated as profits.
Cost to do it: 7 percent IRNR on branch profits out of IRAE taxed income, withheld when remitted or credited.
Example: A branch remitting UYU 4,021,400 of IRAE taxed profit to head office withholds UYU 281,498. / US$100,000 remittance, US$7,000 IRNR.Decreto Nº 149/007 (IRNR regulation), as worded by Decreto Nº 255/026, Art. 6, 2026-10-01 official text · verified 2026-10-27

7. IRAE taxed net income that is more than three fiscal years old at year end is imputed as a deemed dividend in the third month of the following year, after deducting dividends already taxed, previous deemed dividends, investments in shares of resident entities, fixed and intangible assets bought from an identified seller, and part of the growth in gross working capital. Companies listed on a Uruguayan exchange are excluded.
Cost to do it: 7 percent of the deemed dividend, even though no cash leaves the company.
Example: UYU 4,021,400 of accumulated taxed profit older than three years, not reinvested, triggers UYU 281,498 of IRNR. / US$100,000 deemed dividend, US$7,000 IRNR without any payment.Texto Ordenado 2023 (DGI), Title 8 IRNR, Art. 14, 2017-03-01 official text · verified 2026-10-27

Distribution	IRNR	On UYU 4,021,400 (US$100,000)	Norm
Dividend out of IRAE taxed profits	7%	UYU 281,498 (US$7,000)	Title 8 art. 18 B)
Dividend out of untaxed income, parent taxed at home with credit (from 1 Jan 2026)	7%, capped at the foreign credit	Up to UYU 281,498 (US$7,000)	Title 8 art. 19 C) ii); Decreto 149/007 art. 6
Dividend out of untaxed income, parent exempt at home or with tax losses	Exempt	0	Title 8 art. 19 C)
Dividend on shares listed on a Uruguayan exchange	Exempt	0	Title 8 art. 19 C)
Branch profit remitted to head office out of IRAE taxed income	7%	UYU 281,498 (US$7,000)	Decreto 149/007 art. 6
Deemed dividend on taxed profit older than three years	7%	UYU 281,498 (US$7,000)	Title 8 art. 14

IRNR on profits paid out of Uruguay to a foreign shareholder (T.O. 2023 Title 8 art. 14, 18 and 19; Decreto Nº 149/007 as worded by Decreto Nº 255/026); USD at UYU 40.214

Worked example

US$100,000 dividend out of the country: a Uruguayan S.A. with UYU 10,000,000 (about US$248,670) of IRAE taxed net profit allocates UYU 500,000 (about US$12,433) to the legal reserve and declares a UYU 4,021,400 (US$100,000) dividend to its foreign parent. It withholds UYU 281,498 (US$7,000) of IRNR, pays it to the DGI, buys US$93,000 at a bank and wires it abroad. The parent then claims treaty or home country relief.
Untaxed profits, 2026 rule: the same dividend paid out of exempt income to a parent whose country taxes dividends and credits foreign tax bears UYU 281,498 (US$7,000), capped at the credit actually granted; if the parent shows it could not use the credit because of tax losses, the withholding is refunded.

Step by step

1. Close the fiscal year and have the financial statements approved by the shareholders' meeting; check prior losses are covered and the legal reserve is at its level (Ley 16.060 art. 93 and 98).
2. Resolve the dividend, or the 75 percent waiver of the 20 percent minimum in an S.A. (art. 320); the IRNR distribution date for companies is the date of that resolution (Decreto 149/007 art. 6).
3. Classify the source of the profits: IRAE taxed (7 percent), untaxed (check the parent's home taxation and credit under the 2026 rule), pre July 2007 results (allocated first and not taxed, Decreto 149/007 art. 7).
4. Check whether a double tax treaty with the shareholder's country lowers the rate and gather the residence certificate (see taxes/tax-treaties).
5. Withhold IRNR when paying or crediting and pay it to the DGI; pay the shareholder within 90 days of the resolution (art. 99).
6. Convert at a bank or exchange house and transfer by bank wire; no FX filing is needed, but keep the minutes and statements for the bank's know your customer review.

Common traps

Crediting a dividend to the shareholder's current account already triggers withholding: IRNR applies on payment or credit, not only on the wire.
The 2026 rule taxes dividends out of untaxed (for example foreign source or exempt) profits when the parent's country credits the tax; check the parent's tax position before relying on the old exemption.
Distributions that ignore the legal reserve or prior losses can be clawed back from shareholders, except good faith S.A. shareholders (art. 98).
Retaining taxed profit for more than three years does not avoid the 7 percent: the deemed dividend rule taxes it unless it was reinvested in qualifying assets.
Paying a dividend in cash above UI 200,000 (or 5 percent of the operation up to UI 450,000) breaches Ley 19.210 art. 35; see fx/cash-limits-and-border-declarations.

Sources

Related: Uruguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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