Uruguay Taxes for US Expats: 2023 Guide

Uruguay Taxes for US Expats: 2023 Guide

Uruguay Taxes at a Glance

  • Primary Tax Forms: Individual income tax return
  • Tax Deadline: May – August, depending upon residency
  • Currency: Uruguayan Peso (UYU)
  • Population: 84.78 million
  • Capital City: Montevideo
  • Primary Language: Spanish
  • Tax Treaty: No
  • Totalization Agreement: Yes

Life as an Expat in Uruguay

Situated idyllically between Brazil, Argentina, and the Atlantic Ocean, Uruguay offers a mildly warm climate, beautiful spanning beaches, and many urban jungles to explore. It’s also a great place to live if you want to minimize your tax burden. With more than 3.5 million residents in this country and generally no taxes imposed on foreign-earned income, you’ll want to understand how Uruguay taxes for US expats work to remain tax compliant. 

In this guide, we’ll take you through all the crucial details you need to know regarding paying and filing your expat taxes in Uruguay.

US Expat Taxes in Uruguay

Americans living abroad typically must pay their US taxes and taxes to the foreign country where they reside. However, every country has its own tax rules; some even have treaties and agreements with the US.

Uruguay does not currently have a tax treaty with the US, which means US expats in Uruguay are on the hook for paying US and Uruguay taxes on their income. However, some US tax breaks may help reduce your US tax bill, which we’ll walk you through later.

How much can you expect to pay in income tax in Uruguay? Here is how taxes for foreigners in Uruguay are calculated.

Who Has to File Taxes in Uruguay?

Whether a resident or non-resident of Uruguay, you typically have to pay income tax. However, Uruguay typically does not levy income tax on any income earned outside the country. So if you make foreign income, it may be exempt from taxation (there are some exceptions). 

Who Qualifies as a Tax Resident in Uruguay?

If you’re a resident of Uruguay, you’ll owe tax on both Uruguay and foreign income. However, non-residents are only on the hook to pay tax on income earned in Uruguay. Non-residents are not taxed on their foreign-earned income.

Uruguay Resident Qualifications

You are considered a country resident in Uruguay if you meet specific requirements, including the following:

  • You have stayed more than 183 days in Uruguay in a calendar year. Random absences will be taken into account unless you can prove a tax residence in another country.
  • You have economic activities or personal interests in the country of Uruguay, regardless of whether they are direct or indirect.

It is presumed that if a person is defined as a resident of Uruguay, their spouse and dependents are also considered residents of Uruguay.

The 183 days are defined as all days in which the person had a presence in an Uruguayan territory; the time of arrival or departure does not apply. Days spent going to or coming from another country are not computed into the 183 days.

A fiscal residence in another country must be proven by a certificate issued by the fiscal authority of that country. If that amount is less than fiscal interest in Uruguay, you will be considered a resident.

Non-resident Qualifications in Uruguay

If you lived in Uruguay for less than 183 days, you’re typically not considered a resident and instead labeled a non-resident. As of July 2007, all Uruguayan-sourced income is taxed, regardless of resident status.

Income Tax in Uruguay

Uruguay’s income tax is based on a progressive scale — the more money you earn, the higher your income tax rate:

Individual Income Tax Rate in Uruguay

Income tax bracketTax rate
0 UYU – 433,776 UYU0%
433,777 UYU – 619,680 UYU10%
619,681 UYU – 929,520 UYU15%
929,521 UYU – 1,859,040 UYU24%
1,859,041 UYU – 3,098,400 UYU25%
3,098,401  UYU – 4,647,600 UYU27%
4,647,601 UYU – 7,126,320 UYU31%
7,126,321 UYU and up36%

Other Tax Situations in Uruguay

Self-employment Tax

Self-employed people may have to pay social security contributions based on their income in Uruguay. 

Corporate Tax

Companies in Uruguay pay a corporate income tax rate of 25%.

Value-added Tax (VAT)

All consumers in Uruguay pay a value-added tax on goods and services, similar to the sales tax in the United States.

In Uruguay, the general VAT rate is 22% (some exclusions apply).

Wealth Tax

Wealth tax in Uruguay ranges from 0.1% to 0.4% (for residents) and 0.7% to 1.5% (for non-residents). Different rules apply depending on where you live in the country.

Inheritance Tax

There is no inheritance tax in Uruguay.

Property Tax

Property tax rates range from 0% to 0.3% in Uruguay, depending on the value of your property.

Social Security

In Uruguay, employers contribute 12.625% of an employee’s salary to social security funds. The employee will pay between 18.1% to 23.1% into social security.

Do the US and Uruguay have a Tax Treaty?

Though the United States has tax treaties with many countries, Uruguay is not currently one of them. As a US expat, you may be taxed by the US and Uruguay on the same income.

Does Uruguay Have a Totalization Agreement with the US?

Yes, Uruguay does have a totalization agreement with the United States. This agreement prevents US expats from paying into both  Social Security funds.

What Tax Forms do US Expats in Uruguay Need to File?

You’ll need to file a personal income tax form in Uruguay. When you need to file your tax return depends on whether you’re a resident or non-resident.

The Uruguay tax year is the same as the calendar year, spanning from January 1 to December 31. Residents must file their tax returns with the Uruguay tax authority between June and August of the preceding year. Non-residents must turn in their Uruguay tax returns by May.

Get Help with Your Expat Taxes

We hope this guide helped answer your questions about the tax regulations for US expats living in Uruguay. But taxes can be complicated — especially when living in a foreign country — so if you still have questions, feel free to contact Greenback Expat Tax Services.

Don’t just guess. Get the best advice from one of our expat expert CPAs and EAs.
Whether you need tax advice to prepare for a move abroad, to buy property or even retire, Greenback can help. Consults upfront can help avoid costly mistakes and stress later.
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