Countries › Uruguay › Guide › 5. FX and capital controls › Foreign loans to Uruguayan companies: no FX registration, 12 percent IRNR on interest, deduction limits and wealth tax

Foreign loans to Uruguayan companies: no FX registration, 12 percent IRNR on interest, deduction limits and wealth tax

Argentina. For full detail on Argentina, go to The Argentine Thread.

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

Uruguay has no FX registration, approval or minimum term for loans from abroad; the BCU charter lets the central bank compile data on foreign loans to private residents, but no law found requires approval. The cost of cross border debt is tax: interest paid to a foreign lender bears IRNR at 12 percent (25 percent for low or no tax jurisdictions), the borrower can deduct only 48 percent of that interest for IRAE unless the lender is taxed abroad at 25 percent or more, and loans from foreign private lenders do not reduce the 1.5 percent wealth tax base. Cash disbursements and repayments are capped by Ley Nº 19.210, and branch funding from head office is treated as capital.

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

Registration or approval of foreign loans to private borrowers	No approval requirement in the BCU charter; BCU may collect data Ley Nº 16.696 art. 32, as of 2026-10-27 · in force
IRNR on interest paid to non resident lenders	12 %T.O. 2023 Title 8 art. 18 B), as of 2026-10-27 · in force
IRNR on interest paid to lenders in low or no tax jurisdictions	25 %T.O. 2023 Title 8 art. 18 B), as of 2026-10-27 · in force
IRAE deductible share of interest taxed only by IRNR at 12 percent	48 %T.O. 2023 Title 4 art. 31, as of 2026-10-27 · in force
Wealth tax rate for companies (general)	1.5 %T.O. 2023 Title 14 art. 53 D), as of 2026-10-27 · in force

The rule

1. The BCU keeps an updated inventory of all external financial obligations contracted or guaranteed by the State and may collect data on foreign loans to other public entities and to private persons resident in Uruguay. The charter sets no approval or registration requirement for private foreign borrowing, and Ley Nº 16.906 guarantees free transfer of sums linked to an investment.
Cost to do it: No fee or filing to borrow from abroad; answer BCU statistical requests if received.
Example: A Uruguayan S.A. borrows UYU 40,214,000 equivalent in US dollars from its parent and repays it without FX approval. / US$1,000,000 intercompany loan, no FX registration.Ley Nº 16.696 (BCU Charter), as worded by Ley Nº 18.401; Ley Nº 16.906, Ley 16.696 art. 32; Ley 16.906 art. 5, 2008-10-24 official text · verified 2026-10-27

2. Interest paid or credited to a non resident lender without a permanent establishment bears IRNR at the 12 percent rate for other income, or 25 percent when the lender is resident or located in a low or no tax jurisdiction or benefits from a low or no tax regime. The Uruguayan payer, as an IRAE taxpayer, is the withholding agent: the regulation sets the withholding on interest and other capital income at 12 percent, applied on payment or credit to the amount paid plus the withholding.
Cost to do it: 12 percent of gross interest withheld at source; the IRNR rate is 25 percent for lenders in low or no tax jurisdictions; a treaty may reduce the rate (see taxes/tax-treaties).
Example: Interest of UYU 3,217,120 a year on the loan bears IRNR of UYU 386,054. / US$80,000 of interest (8 percent on US$1,000,000), US$9,600 withheld.Texto Ordenado 2023 (DGI), Title 8 IRNR; Decreto Nº 149/007, Title 8 art. 18 literal B); Decreto 149/007 art. 34 literal c) and art. 35, 2022-10-20 official text · verified 2026-10-27

3. Exempt from IRNR: interest on public debt; interest on loans to IRAE taxpayers whose assets used for non taxed income exceed 90 percent of total assets (measured on the prior year); income of international organisations Uruguay belongs to and interest on loans from foreign State financial institutions for long term productive projects; and exchange differences on foreign currency holdings, deposits and credits.
Cost to do it: No IRNR for qualifying lenders or borrowers.
Example: A development bank loan from a foreign State financial institution for a long term productive project pays no IRNR on its interest. / Interest on such a US$1,000,000 loan is exempt; FX gains of the lender are exempt too.Texto Ordenado 2023 (DGI), Title 8 IRNR, Art. 19 literals A), B), E) and M), 2007-07-01 official text · verified 2026-10-27

4. Interest is deductible for IRAE only if it is taxable income for the lender under IRAE, IRPF, IRNR or an effective foreign income tax. When the lender is taxed by IRNR, the deduction is limited to the ratio between 12 percent (or 25 percent if that rate applies) and the 25 percent IRAE rate, that is 48 percent; if the lender is taxed abroad, the deduction is full when the effective foreign rate is 25 percent or more and proportional otherwise. Transfer pricing rules apply on top. Financial expenses, including exchange differences and interest, are deductible only in the proportion of assets producing taxed income to total assets.
Cost to do it: Loss of 52 percent of the deduction when the lender bears only IRNR at 12 percent and is not taxed abroad at 25 percent or more.
Example: Of UYU 3,217,120 of interest paid to a lender taxed only by IRNR at 12 percent, UYU 1,544,218 is deductible, saving UYU 386,054 of IRAE. / Of US$80,000 of interest, US$38,400 is deductible, an IRAE saving of US$9,600.Texto Ordenado 2023 (DGI), Title 4 IRAE, Art. 30, art. 31 and art. 36, 2018-07-13 official text · verified 2026-10-27

5. For the wealth tax (Impuesto al Patrimonio), companies may deduct only listed liabilities: debts with Uruguayan banks, financial houses and other local lenders listed in the law, debts with States, international credit organisations Uruguay belongs to and foreign State financial institutions for long term productive projects, supplier debts other than loans, unpaid taxes, and publicly issued listed bonds. A loan from a foreign parent or foreign private bank is not deductible, and the general rate for companies is 1.5 percent.
Cost to do it: Up to 1.5 percent a year of the balance of a non deductible foreign loan, to the extent it finances taxed assets.
Example: A UYU 40,214,000 parent loan that funds taxed assets can add up to UYU 603,210 a year of wealth tax. / US$1,000,000 loan, up to US$15,000 a year of wealth tax.Texto Ordenado 2023 (DGI), Title 14 Impuesto al Patrimonio, Art. 19 and art. 53 literal D), 2026-01-01 official text · verified 2026-10-27

6. Exchange differences are computed for IRAE by annual revaluation of balances and on payments and collections during the year, using the interbank buying rate (billete) at the close of the day before the operation. Exchange differences on changing a debt to a currency other than the one originally agreed are not computed, nor are those on contribution and withdrawal accounts, placements and financial operations between a branch and its foreign head office, which are always capital accounts.
Cost to do it: No direct cost; branch funding from head office gives no deductible FX loss and no interest deduction as a loan.
Example: A US$1,000,000 loan revalued from UYU 40.214 to a higher rate at year end produces a deductible exchange loss for the borrower, subject to the art. 36 proportion; the same balance owed by a branch to head office does not. / US$1,000,000 debt: FX movements count for IRAE except on head office capital accounts.Decreto Nº 150/007 (IRAE regulation), Art. 17, art. 63 BIS and art. 74, 2009-12-15 official text · verified 2026-10-27

7. Cash limits apply to loans: the delivery of money as a loan, and payments arising from it, must respect the ceiling of UI 200,000 or 5 percent of the operation up to UI 450,000, unless a bank, electronic money issuer or BCU regulated credit, exchange or transfer firm is a party.
Cost to do it: Fine of 25 percent of the cash beyond the limit, minimum UI 1,000.
Example: A private loan of UYU 2,000,000 can be disbursed in cash only up to UYU 1,330,320 in October 2026. / About US$49,734 loan, cash part capped at about US$33,081.Ley Nº 19.210 as worded by Ley Nº 20.469; Decreto Nº 238/026, Ley 19.210 art. 35; Decreto 238/026 art. 2 and art. 5, 2026-04-20 official text · verified 2026-10-27

Item	UYU	USD	Norm
Interest paid	3,217,120	80,000	Loan terms
IRNR withheld at 12%	386,054	9,600	Title 8 art. 18 B)
IRAE deductible interest (48%)	1,544,218	38,400	Title 4 art. 31
IRAE saving at 25%	386,054	9,600	Title 4 art. 23 and 31
Wealth tax on non deductible loan (maximum, 1.5%)	603,210	15,000	Title 14 art. 19 and 53 D)

Cost of a US$1,000,000 loan at 8 percent from a foreign parent taxed only by IRNR, year one (T.O. 2023 Title 4 art. 31, Title 8 art. 18, Title 14 art. 19 and 53); USD at UYU 40.214

Worked example

Parent loan versus local bank loan: a Uruguayan subsidiary borrows US$1,000,000 (UYU 40,214,000) at 8 percent from its foreign parent. It withholds US$9,600 of IRNR on US$80,000 of interest, deducts only US$38,400 for IRAE (saving US$9,600 instead of US$20,000), and cannot deduct the loan for wealth tax, which can cost up to US$15,000 a year. A loan of the same size from a Uruguayan bank gives a full interest deduction and is deductible for wealth tax.
Lender taxed at 25 percent abroad: if the parent shows it is effectively taxed at 25 percent or more on the interest, the whole US$80,000 is deductible (IRAE saving US$20,000), while the 12 percent IRNR still applies unless a treaty reduces it.

Step by step

1. Document the loan in writing with arm's length terms (transfer pricing applies to related parties; see taxes/transfer-pricing).
2. Disburse by bank transfer; no BCU registration or FX approval is required.
3. On each interest payment or credit, withhold IRNR at 12 percent (Decreto 149/007 art. 35) or the treaty rate with a residence certificate; check whether the lender is subject to the 25 percent rate and pay it to the DGI.
4. Compute the IRAE deduction ratio (48 percent, or full if the lender proves an effective foreign rate of at least 25 percent) and keep the evidence.
5. At year end revalue the balance at the interbank buying rate and apply the art. 36 proportion to financial expenses.
6. Include the loan as a non deductible liability in the wealth tax return unless the lender is on the art. 19 list.

Common traps

Grossing up a net of tax interest clause raises the cost: the withholding base is the amount paid plus the withholding.
The 48 percent deduction limit applies even to arm's length interest; Uruguay has no debt to equity ratio, but this rule and the wealth tax make parent debt expensive (see taxes/thin-capitalization).
Interest owed to a head office by its Uruguayan branch is a capital account, not a loan, for IRAE.
Changing the currency of an existing debt does not generate a computable exchange difference.
A lender in a jurisdiction on the low or no tax list pays 25 percent IRNR and loans from there are presumed related for transfer pricing.

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

← Bringing capital into Uruguay and taking it back: contributions, capital reductions, redemptions and cash rulesUruguay's FX market and exchange rate: floating peso, BCU inflation targeting, dollar contracts and the rate used for tax →