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Taxes in Uruguay: the core system for foreign investors, from IRAE and dividend withholding to IVA, wealth tax and the domestic minimum tax

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

Uruguay taxes companies on Uruguayan source income only: the Impuesto a las Rentas de las Actividades Económicas (IRAE) is a flat 25 percent on net taxable income, with losses carried forward for five years, and companies also pay the wealth tax (IP) at 1.5 percent of taxable net equity. Payments to non residents bear the Impuesto a las Rentas de los No Residentes (IRNR), withheld by the payer: 7 percent on dividends paid by IRAE taxpayers, 12 percent on most other income such as interest and royalties, and 25 percent for recipients in low or no tax jurisdictions; IVA is 22 percent, with a 10 percent minimum rate for listed basics. The system moved in 2026: Ley Nº 20.446 of 16 December 2025 added a 15 percent domestic minimum tax for multinational groups with consolidated revenue of at least 750 million euros and reworded several IRAE, IRNR and IRPF source rules, mostly from 1 January 2026.

USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026; UI amounts use UYU 6.6780 per Unidad Indexada, the BCU quotation for 26 October 2026. Both were retrieved from the BCU quotations service on the verification date; conversions are for orientation only.

Key facts

Corporate income tax rate (IRAE)	25 %T.O. 2023 Title 4 art. 23, as of 2026-10-27 · in force
Corporate tax base	Uruguayan source income, with deemed source rules for some foreign income T.O. 2023 Title 4 art. 1 and art. 16, as of 2026-10-27 · in force
Withholding on dividends paid to non residents by IRAE taxpayers (IRNR)	7 %T.O. 2023 Title 8 art. 18 literal B), as of 2026-10-27 · in force
Withholding on interest on loans paid to non residents (IRNR general rate)	12 %T.O. 2023 Title 8 art. 18 literal B), as of 2026-10-27 · in force
Withholding on royalties paid to non residents (IRNR general rate)	12 %T.O. 2023 Title 8 art. 18 literal B), as of 2026-10-27 · in force
IRNR rate for recipients in low or no tax jurisdictions (except dividends from IRAE taxpayers)	25 %T.O. 2023 Title 8 art. 18 literal B), as of 2026-10-27 · in force
IVA basic rate	22 %T.O. 2023 Title 10 art. 34 literal A), as of 2026-10-27 · in force
IVA minimum rate	10 %T.O. 2023 Title 10 art. 34 literal B) and art. 36, as of 2026-10-27 · in force
Wealth tax (IP) on companies, general rate	1.5 %T.O. 2023 Title 14 art. 53 literal D), as of 2026-10-27 · in force
Wealth tax (IP) on banks and financial houses	2.8 %T.O. 2023 Title 14 art. 53 literal C), as of 2026-10-27 · in force
Tax loss carryforward period	5 yearsT.O. 2023 Title 4 art. 32 literal F), as of 2026-10-27 · in force
Domestic minimum top up tax, minimum effective rate	15 %Ley Nº 20.446 art. 665, T.O. 2023 Title 21 art. 2, as of 2026-10-27 · in force
Domestic minimum top up tax, group revenue threshold	750000000 EURLey Nº 20.446 art. 665, T.O. 2023 Title 21 art. 3, as of 2026-10-27 · in force
Uruguayan assets value above which a sale of a foreign holding can be Uruguayan source	31500000 UIT.O. 2023 Title 4 art. 16 numeral 5 (reworded by Ley Nº 20.446 art. 644), as of 2026-10-27 · in force
Limitation period for tax collection (ten years with fraud or non filing)	5 yearsCódigo Tributario art. 38, as of 2026-10-27 · in force

The rule

1. IRAE is an annual tax on Uruguayan source income from economic activities of any kind. Income is Uruguayan source when it comes from activities carried out, assets located or rights used economically in Uruguay, regardless of the nationality, domicile or residence of the parties or where the contract is signed. Taxpayers include resident companies of any type (S.A., SAS, SRL and other Ley Nº 16.060 companies), permanent establishments of non residents, trusts other than guarantee trusts and closed credit investment funds. The rate is 25 percent of net taxable income. Some foreign items are deemed Uruguayan source: technical and advertising services rendered from abroad to IRAE taxpayers, and, for entities of a multinational group, certain foreign passive income (dividends, interest, royalties, rents and related gains) when the entity does not meet the substance test of art. 10 of Title 4, plus income from foreign patents and registered software outside the qualifying ratio and all foreign income from trademarks.
Cost to do it: 25 percent of net taxable income; ordinary accounting and filing costs are set by each provider.
Example: A Uruguayan SAS with net taxable income of UYU 40,214,000 pays IRAE of UYU 10,053,500. / Net taxable income of US$1,000,000 bears IRAE of US$250,000.Texto Ordenado 2023 (DGI), Title 4 IRAE, as amended by Ley Nº 20.446 of 16 December 2025, Title 4 art. 1, art. 12 literal A), art. 16 and art. 23, 2006-12-27 official text · verified 2026-10-27 · changed: Ley Nº 20.446 (published in the Diario Oficial on 8 January 2026, in force from 1 January 2026 under its art. 3 unless stated otherwise) art. 644 reworded the indirect transfer rule of art. 16 numeral 5 and art. 646 reworded art. 12 literal A) numerals 2 and 6, so that numeral 2 now covers the commercial companies of Ley Nº 16.060 and SAS under Ley Nº 19.820; the 25 percent rate of art. 23 is unchanged.

2. Non residents without a permanent establishment pay IRNR on Uruguayan source income, normally through withholding by the IRAE taxpayer that pays or credits it. Rates: 7 percent on dividends or profits paid or credited by IRAE taxpayers and on the deemed dividends imputed on IRAE taxed income older than three fiscal years; 25 percent on income of entities resident or located in low or no tax jurisdictions or regimes, except dividends paid by IRAE taxpayers; 12 percent on all other income, which covers among others interest on loans and royalties paid abroad. Reduced scheduled rates of 0.5 to 12 percent apply to interest on local bank deposits and on publicly offered and listed debt of resident issuers, depending on currency and term.
Cost to do it: 7, 12 or 25 percent of the gross payment, withheld at source by the payer; a treaty in force with the recipient's country may lower the rate.
Example: Royalties of UYU 4,021,400 paid to a foreign licensor bear IRNR of UYU 482,568 at 12 percent, or UYU 1,005,350 at 25 percent if the licensor sits in a low or no tax jurisdiction. / US$100,000 of royalties: US$12,000 withheld at the general rate, US$25,000 for a low tax jurisdiction recipient.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 1, art. 9, art. 10, art. 14 and art. 18 (rates as set by Ley Nº 20.075 of 20 October 2022, art. 487), 2022-10-20 official text · verified 2026-10-27

3. IVA (value added tax) has a basic rate of 22 percent and a minimum rate of 10 percent. The minimum rate covers listed goods and services, among them common bread, fish and meat, edible oils, rice, flour, pasta, sugar, yerba, coffee and tea, medicines and their active ingredients, hotel lodging services, non employee health services, local tourist packages and gasoil. The Executive Branch is empowered to reduce the rates, and the law directs a gradual cut of the basic rate to 20 percent when fiscal results allow; no such cut is in the text in force.
Cost to do it: 22 percent or 10 percent of the taxable price, charged to the customer and paid to the DGI net of input IVA.
Example: A service invoiced at UYU 402,140 plus IVA carries UYU 88,470.80 of IVA at the basic rate, for a total of UYU 490,610.80. / A US$10,000 service bears US$2,200 of IVA at 22 percent; at the 10 percent minimum rate it would be US$1,000.Texto Ordenado 2023 (DGI), Title 10 IVA, Title 10 art. 34, art. 35 and art. 36 (art. 34 from Ley Nº 18.083 of 27 December 2006, art. 25), 2006-12-27 official text · verified 2026-10-27

4. IRAE taxpayers listed in art. 12 of Title 4, including commercial companies and permanent establishments, pay the annual wealth tax (Impuesto al Patrimonio, IP) at 1.5 percent of taxable net equity. Banks and financial houses pay 2.8 percent, bearer bonds and similar securities 3.5 percent, and entities in low or no tax jurisdictions that do not act through a permanent establishment 3 percent. Monotributo taxpayers are excluded. The Executive Branch may cut the rates by up to 50 percent.
Cost to do it: 1.5 percent of taxable net equity each year for an ordinary company.
Example: A company with taxable net equity of UYU 100,535,000 pays IP of UYU 1,508,025. / Taxable net equity of US$2,500,000 bears IP of US$37,500 a year.Texto Ordenado 2023 (DGI), Title 14 Impuesto al Patrimonio, Title 14 art. 4 literal B), art. 53 literals B) to E) and art. 54, 2017-01-05 official text · verified 2026-10-27

5. Tax losses can be deducted from IRAE taxable income for up to five years from the close of the fiscal year in which they arose, adjusted for inflation; for fiscal years beginning on or after 1 January 2016 the adjustment uses the consumer price index (IPC). Results are offset against the oldest losses first. Losses are not counted as part of net taxable income when computing the deemed dividends of art. 14 of Title 8.
Cost to do it: No fee; the deduction is claimed in the annual IRAE return.
Example: A loss of UYU 8,042,800 in fiscal year 2026 can be offset against profits up to fiscal year 2031, adjusted by the IPC; the unused balance expires after that. / A US$200,000 loss in 2026 shelters up to the same amount, inflation adjusted, of profits through 2031, saving up to US$50,000 of IRAE at 25 percent.Texto Ordenado 2023 (DGI), Title 4 IRAE, Title 4 art. 32 literal F), 2006-12-27 official text · verified 2026-10-27

6. A domestic minimum top up tax (Impuesto Mínimo Complementario Doméstico) applies to constituent entities located in Uruguay of multinational groups whose ultimate parent's consolidated financial statements show annual revenue of at least 750 million euros in at least two of the four preceding fiscal years. It is charged when the group's effective tax rate in Uruguay, computed each fiscal year, is below 15 percent, on the excess profit after substance based exclusions of 9.6 percent of eligible payroll and 7.6 percent of the carrying value of tangible assets for fiscal years beginning in 2025, both percentages declining yearly from 2026. Each constituent entity, or a designated local entity, files a sworn return with the DGI. The Executive Branch must set how existing tax stability guarantees fit with the new tax.
Cost to do it: The top up needed to lift the group's Uruguayan effective rate to 15 percent on excess profit; groups below the 750 million euro revenue test are outside the tax.
Example: A Uruguayan subsidiary of an in scope group whose Uruguayan effective rate is 10 percent because of an IRAE exoneration faces a top up of 5 percentage points on its excess profit; on excess profit of UYU 40,214,000 that is UYU 2,010,700, before the de minimis and other adjustments of Title 21. / On US$1,000,000 of excess profit, a 5 point top up is US$50,000.Ley Nº 20.446 (National Budget 2025 to 2029), adding Title 21 to the Texto Ordenado 2023, Art. 665 (Title 21 art. 1, 2, 3, 14, 15, 17, 18 and 71) and art. 666, 2025-12-16 official text · verified 2026-10-27 · changed: New tax: Ley Nº 20.446 of 16 December 2025, published on 8 January 2026, incorporated Title 21 into the Texto Ordenado 2023 from the law's promulgation, aligning Uruguay with the Inclusive Framework global minimum tax rules.

7. The right to collect taxes prescribes after five years counted from the end of the civil year in which the taxable event occurred; for annual income taxes the taxable event occurs at the close of the fiscal year. The term extends to ten years when the taxpayer committed fraud (defraudación) or failed to register, to report the taxable event or to file returns. Sanctions and interest follow the tax's term, except contravention penalties, which always prescribe in five years.
Cost to do it: Records must be kept and defensible for at least the five year term, ten where returns were not filed.
Example: IRAE for a fiscal year closing on 31 December 2026 can be assessed until 31 December 2031; if no return was filed the DGI has until 31 December 2036. / A US$250,000 IRAE liability for 2026 stays open to review for five years, or ten if the return was never filed.Código Tributario (Decreto Ley Nº 14.306), Art. 38, 1974-11-29 official text · verified 2026-10-27

8. Uruguay and Argentina signed in Colonia on 23 April 2012 an agreement on exchange of tax information and a method to avoid double taxation, with a protocol, approved in Uruguay by Ley Nº 19.032. Uruguayan IRNR is withheld under domestic law on payments to Argentine residents; how Argentina credits or exempts that income is an Argentine tax question.
Cost to do it: No Uruguayan filing cost; advice on the Argentine side is a separate cost.
Example: A UYU 4,021,400 dividend out of IRAE taxed profits paid to an Argentine parent bears the same 7 percent IRNR, UYU 281,498, as one paid to any other foreign parent. / US$100,000 dividend, US$7,000 Uruguayan withholding; see The Argentine Thread guide for the Argentine side.Ley Nº 19.032 (approval of the Uruguay Argentina tax information exchange and double taxation agreement), Single article approving the agreement and protocol, 2012-12-27 official text · verified 2026-10-27

Tax	Rate	Who pays or withholds	Rule
IRAE (corporate income tax)	25 percent of net taxable Uruguayan source income	The company or permanent establishment	T.O. 2023 Title 4 art. 23
IRNR on dividends	7 percent	Non resident shareholder; withheld by the paying company	T.O. 2023 Title 8 art. 18 literal B)
IRNR on interest, royalties and other income	12 percent; 25 percent for low or no tax jurisdictions; 0.5 to 12 percent on local deposits and listed debt	Non resident recipient; withheld by the IRAE taxpayer payer	T.O. 2023 Title 8 art. 10 and art. 18
IVA (value added tax)	22 percent basic; 10 percent minimum for listed items	Charged to customers, paid by the seller net of input IVA	T.O. 2023 Title 10 art. 34 and art. 36
IP (wealth tax) on companies	1.5 percent of taxable net equity; 2.8 percent banks; 3 percent low tax entities without a PE	The company	T.O. 2023 Title 14 art. 53
Domestic minimum top up tax	Top up to a 15 percent effective rate	Uruguayan entities of groups with revenue of 750 million euros or more	Ley Nº 20.446 art. 665 (T.O. 2023 Title 21)

Main Uruguayan taxes for a foreign owned company, with the rule behind each (consolidated text in force on 27 October 2026).

Step	UYU	US$
Net taxable income	40,214,000	1,000,000
IRAE at 25 percent	10,053,500	250,000
Profit available for dividend	30,160,500	750,000
IRNR at 7 percent	2,111,235	52,500
Net received by the parent	28,049,265	697,500
Combined rate	30.25 percent	30.25 percent

Combined tax on US$1,000,000 of Uruguayan profit distributed to a foreign parent outside low tax jurisdictions, before any treaty relief (UYU at 40.214 per US dollar, BCU, 26 October 2026).

Worked example

A US parent owns a Uruguayan SAS that earns net taxable income of UYU 40,214,000 (US$1,000,000) in fiscal year 2026. The SAS pays IRAE of UYU 10,053,500 (US$250,000) (T.O. 2023 Title 4 art. 23).
The SAS has taxable net equity of UYU 100,535,000 (US$2,500,000) at year end and pays IP of UYU 1,508,025 (US$37,500) (Title 14 art. 53 literal D).
During 2026 the SAS pays its parent UYU 4,021,400 (US$100,000) of royalties and withholds IRNR of UYU 482,568 (US$12,000) at 12 percent (Title 8 art. 18). If the licensor were in a low or no tax jurisdiction the withholding would be UYU 1,005,350 (US$25,000).
When the SAS distributes the after tax profit of UYU 30,160,500 (US$750,000), it withholds IRNR at 7 percent, UYU 2,111,235 (US$52,500), and the parent receives UYU 28,049,265 (US$697,500), a combined Uruguayan burden of 30.25 percent before any treaty relief. If the profit is left undistributed for more than three fiscal years, the same 7 percent is imputed as a deemed dividend (Title 8 art. 14).
If the parent were an Argentine company, the Uruguayan withholding would be the same; relief on the Argentine side under the 2012 agreement approved by Ley Nº 19.032 is covered in The Argentine Thread guide.

Step by step

Before trading, register the company with the DGI and obtain its RUT (see Start here and Entities); this enrols it for IRAE, IVA and IP.
Map every income stream against the source rule of Title 4 art. 16: Uruguayan activities, assets and rights used in Uruguay are taxed; check the deemed source rules for technical services from abroad and, for group entities, foreign passive income and intellectual property.
Set up withholding on every payment abroad: 7 percent on dividends, 12 percent on interest, royalties and most other income, 25 percent if the recipient is in a low or no tax jurisdiction (Title 8 art. 10 and art. 18), and check whether a treaty lowers the rate.
Charge IVA at 22 percent, or 10 percent on the items listed in Title 10 art. 36, and keep input IVA support.
At each fiscal year end compute IRAE, using any losses from the previous five years adjusted by the IPC, and IP at 1.5 percent of taxable net equity.
If the group's consolidated revenue reached 750 million euros in two of the last four years, model the Uruguayan effective rate under Title 21 and plan the sworn return of art. 71, especially if the company enjoys IRAE exonerations.
Keep books and support for at least five years after the end of the civil year of each fiscal close, ten if any return was not filed (Código Tributario art. 38).

Common traps

Source rules reach some foreign income: technical, management and advertising services rendered from abroad to IRAE taxpayers are Uruguayan source (Title 4 art. 16 numeral 2), and an entity of a multinational group that lacks the substance required by art. 10 of Title 4 is taxed on foreign dividends, interest, royalties and gains (art. 16 numeral 7). Territoriality is not a blanket exemption for groups.
Selling a foreign holding company can be taxed in Uruguay: under the rule as reworded by Ley Nº 20.446, the transfer of shares of a non resident entity is Uruguayan source if at any time in the prior 365 days more than 50 percent of its assets were Uruguayan, or Uruguayan assets exceeded UI 31,500,000 (about UYU 210,357,000 or US$5.23 million on 26 October 2026) and more than 50 percent of them change hands (Title 4 art. 16 numeral 5).
Undistributed profit is not tax free for long: IRAE taxed income older than three fiscal years is imputed as a deemed dividend and bears IRNR at 7 percent (Title 8 art. 14), whether or not cash is paid out.
The 25 percent IRNR rate for low or no tax jurisdictions applies to interest, royalties and fees, so routing a loan or license through such a jurisdiction more than doubles the withholding, and companies located there also pay IP at 3 percent if they hold Uruguayan assets without a permanent establishment (Title 8 art. 18; Title 14 art. 53 literal E).
Losses expire: anything not used within five years of the close of the loss year is lost (Title 4 art. 32 literal F), which matters for start ups with long ramp ups.
Large groups can lose part of an incentive: an IRAE exoneration under the investment promotion regime that pulls the Uruguayan effective rate below 15 percent can be offset by the domestic minimum top up tax for in scope groups (Ley Nº 20.446 art. 665 and 666).

Sources

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