Countries › Uruguay › Guide › 6. Taxes › Withholding on payments abroad in Uruguay (IRNR): 7 percent on dividends, 12 percent on interest, royalties and services, 25 percent for low tax jurisdictions

Withholding on payments abroad in Uruguay (IRNR): 7 percent on dividends, 12 percent on interest, royalties and services, 25 percent for low tax jurisdictions

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

Non residents without a permanent establishment pay the Impuesto a las Rentas de los No Residentes (IRNR) on Uruguayan source income, normally withheld by the Uruguayan company that pays or credits it. Rates: 7 percent on dividends paid by IRAE taxpayers, 12 percent on interest, royalties, technical services and other income, 25 percent when the recipient sits in a low or no tax jurisdiction, and scheduled rates from 0.5 to 12 percent on local deposits and listed debt. Undistributed profit older than three fiscal years is taxed as a deemed dividend at 7 percent, and dividends out of income not taxed by IRAE, such as free zone profit, are generally exempt; treaties can cut the 12 percent rate to 10 percent.

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

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
Withholding on technical services rendered from abroad to IRAE taxpayers	12 %T.O. 2023 Title 8 art. 7 numeral 1) and art. 18, 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
Age of undistributed IRAE taxed income that triggers a deemed dividend	3 fiscal yearsT.O. 2023 Title 8 art. 14, as of 2026-10-27 · in force
UYU per US dollar used for conversions (BCU, DLS. USA BILLETE, 26 October 2026)	40.214 UYUBCU quotations service, as of 2026-10-27 · in force

The rule

1. IRNR applies to Uruguayan source income of non resident individuals and entities. IRAE taxpayers, the State and other public entities, and associations and foundations that pay or credit Uruguayan source business income to non residents are designated withholding agents. The withholding base is the net amount remitted plus the withholding itself, so a net of tax payment must be grossed up.
Cost to do it: The withheld tax is paid to the DGI by the Uruguayan payer.
Example: To remit a net UYU 3,538,832 of royalties, the payer withholds UYU 482,568 at 12 percent on a gross base of UYU 4,021,400. / Agreeing a net US$88,000 royalty means a gross base of US$100,000 and US$12,000 of IRNR.Texto Ordenado 2023 (DGI), Title 8 IRNR; Decreto Nº 149/007 (IRNR regulation), Title 8 art. 1 and art. 13; Decreto Nº 149/007 art. 26 and art. 27, 2006-12-27 official text · verified 2026-10-27

2. Rates on income other than deposits and listed debt: 7 percent on dividends or profits paid or credited by IRAE taxpayers and on deemed dividends; 25 percent on income of entities resident, domiciled or located in low or no tax jurisdictions or regimes, except dividends paid by IRAE taxpayers; 12 percent on all other income, which covers interest on loans, royalties and fees.
Cost to do it: 7, 12 or 25 percent of the gross payment.
Example: A dividend of UYU 30,160,500 bears UYU 2,111,235 of IRNR. / A US$750,000 dividend bears US$52,500; a US$100,000 loan interest payment bears US$12,000, or US$25,000 if the lender is in a low tax jurisdiction.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 18 literal B) (rates set by Ley Nº 20.075, art. 487), 2022-10-20 official text · verified 2026-10-27

3. Interest on deposits in Uruguayan financial institutions, and on publicly offered and listed debt issued by residents, bears scheduled rates: in Uruguayan pesos at a fixed nominal rate 5.5 percent up to one year, 2.5 percent over one and up to three years, 0.5 percent over three years; in pesos with an adjustment clause 10, 7 and 5 percent for the same terms; in foreign currency 12 percent up to one year and 7 percent over three years.
Cost to do it: Withheld by the paying institution.
Example: Interest of UYU 402,140 on a two year fixed rate peso deposit bears UYU 10,053.50 of IRNR at 2.5 percent. / US$10,000 of interest on a dollar deposit of one year or less bears US$1,200 at 12 percent.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 18 literal A), 2022-10-20 official text · verified 2026-10-27

4. Deemed dividends: IRAE taxed net income that, at the close of a fiscal year, is more than three years old is imputed as a dividend in the third month of the following year, after deducting dividends already taxed, earlier deemed dividends, investments in shares of resident entities, fixed and intangible assets with an identified seller, and part of the growth in working capital. The imputed amount bears IRNR at 7 percent.
Cost to do it: 7 percent of the deemed dividend, without any cash distribution.
Example: UYU 40,214,000 of 2021 profit neither distributed nor reinvested in qualifying assets by the close of 2025 is imputed in March 2026 and bears UYU 2,814,980 of IRNR. / US$1,000,000 of stale profit costs US$70,000 of IRNR even if never paid out.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 14 and art. 18, 2006-12-27 official text · verified 2026-10-27

5. Exemptions include: interest on public debt; interest on loans to IRAE taxpayers whose assets used for non taxed income exceed 90 percent of total assets; dividends paid by resident entities out of income not taxed by IRAE (as worded by Ley Nº 20.446); dividends on shares listed on Uruguayan exchanges; gains from redemptions of equity of IRAE taxpayers; exchange differences; and gains on transfers below UI 30,000 each and UI 90,000 a year.
Cost to do it: No IRNR where the exemption applies; the payer keeps the support.
Example: Dividends paid by a free zone user out of exempt free zone income are outside the 7 percent; on UYU 30,160,500 that saves UYU 2,111,235. / Saving of US$52,500 on a US$750,000 dividend out of non IRAE taxed profit.Texto Ordenado 2023 (DGI), Title 8 IRNR, as amended by Ley Nº 20.446, Title 8 art. 19 literals A) to H), 2006-12-27 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 657 replaced literal C) of art. 19 (dividends), in force from 1 January 2026.

6. Income of entities in low or no tax jurisdictions from Uruguayan real estate pays the general rate plus a complementary 5.25 percent, and the regulation sets withholding at 30.25 percent on real estate income of such entities (other than individuals), 25 percent on their other business income and 12 percent in the remaining cases.
Cost to do it: 30.25 percent of gross rent for low tax entities owning Uruguayan property.
Example: Rent of UYU 402,140 paid to a low tax jurisdiction company bears UYU 121,647 of withholding. / US$10,000 of rent paid to such a company bears US$3,025.Texto Ordenado 2023 (DGI), Title 8 IRNR; Decreto Nº 149/007, Title 8 art. 16 literal A); Decreto Nº 149/007 art. 27, 2017-01-05 official text · verified 2026-10-27

7. Technical services (management, technical, administration or advisory services) and advertising services rendered from abroad to IRAE taxpayers are Uruguayan source when linked to IRAE taxed income, so they bear IRNR at 12 percent through withholding.
Cost to do it: 12 percent of the fee, and only 48 percent of the fee is deductible for IRAE unless the provider shows a 25 percent effective foreign rate.
Example: A UYU 2,010,700 management fee paid to a foreign affiliate bears UYU 241,284 of IRNR. / A US$50,000 management fee from abroad bears US$6,000 of IRNR.Texto Ordenado 2023 (DGI), Title 8 IRNR, Title 8 art. 7 numeral 1) and art. 18, 2006-12-27 official text · verified 2026-10-27

Currency and type	Up to 1 year	Over 1 and up to 3 years	Over 3 years
Pesos, fixed nominal rate	5.5 percent	2.5 percent	0.5 percent
Pesos with adjustment clause	10 percent	7 percent	5 percent
Foreign currency	12 percent	Not stated	7 percent

IRNR rates on deposits and on publicly offered, listed debt of resident issuers (T.O. 2023 Title 8 art. 18 literal A). The foreign currency cell for over one and up to three years is blank in the official text.

Payment	IRNR	Deductible for the payer
Dividend from IRAE taxed profit	7 percent	Not an expense
Dividend from income not taxed by IRAE	Exempt (art. 19 literal C)	Not an expense
Loan interest	12 percent; 25 percent low tax	48 percent; 100 percent at 25
Royalties	12 percent; 25 percent low tax	48 percent; 100 percent at 25
Technical and advertising services from abroad	12 percent; 25 percent low tax	48 percent; 100 percent at 25

Withholding on common payments abroad and the IRAE deductibility of the payment (T.O. 2023 Title 8 art. 18; Title 4 art. 31).

Worked example

A Uruguayan S.A. owned by a Spanish parent declares a dividend of UYU 30,160,500 (US$750,000) out of IRAE taxed profit. It withholds IRNR at 7 percent, UYU 2,111,235 (US$52,500), and pays the DGI.
The same company pays its parent UYU 4,021,400 (US$100,000) of loan interest. Domestic IRNR is 12 percent, UYU 482,568 (US$12,000); the Uruguay Spain treaty caps tax on interest at 10 percent, UYU 402,140 (US$10,000), if the parent is the beneficial owner and documents its residence (see Tax treaties).
If the company had kept the profit for more than three fiscal years without reinvesting it in qualifying assets, the 7 percent would have been due anyway as a deemed dividend (Title 8 art. 14).
For an Argentine parent the domestic 7 and 12 percent rates apply in Uruguay; the Argentine side of the 2012 agreement approved by Ley Nº 19.032 is covered in The Argentine Thread guide.

Step by step

Classify each payment abroad: dividend, interest, royalty, technical service, rent or other.
Check whether the recipient sits in a low or no tax jurisdiction under the regulation; if so the rate is 25 percent (30.25 percent on real estate income).
Check exemptions in Title 8 art. 19 (non taxed income dividends, listed shares, public debt, 90 percent asset test loans) and keep the support.
Apply any treaty in force with the recipient's country after obtaining a residence certificate; otherwise withhold the domestic rate.
Gross up net of tax contracts: the base is the net remitted plus the tax (Title 8 art. 13).
Track the age of undistributed taxed profit each year end to anticipate deemed dividends (art. 14).

Common traps

Contracts that promise the foreign party a net amount make the Uruguayan payer bear the grossed up IRNR (Title 8 art. 13).
Paying interest or fees to a low tax jurisdiction lifts the withholding from 12 to 25 percent, and transfer pricing presumes such payments are not at arm's length (Title 8 art. 18; Title 4 art. 48).
Leaving profits in the company does not defer dividend tax indefinitely: after three fiscal years they become deemed dividends at 7 percent unless reinvested in qualifying assets (Title 8 art. 14).
The IRNR on interest and royalties also cuts the payer's IRAE deduction to 48 percent (Title 4 art. 31), so the true cost is higher than the withholding rate alone.
The foreign currency deposit rate for terms over one and up to three years is not stated in the consolidated text; confirm with the paying institution before relying on any rate for that bracket.

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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