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Uruguay
Overview
Last reviewed - 30 December 2021The Republic of Uruguay is located in South America, between Brazil and Argentina, with a coast on the Atlantic Ocean. It is divided into 19 departments, with Montevideo as the capital and chief port. Spanish is the official language of Uruguay, and the currency is the Uruguayan peso (UYU).
Uruguay has existed as an independent republic since 18 July 1830, when its first Constitution was approved. Since then, it has taken advantage of its natural harbour to become an important commercial centre.
After five years of stagnation, the pandemic caused a drop in the Gross Domestic Product (GDP) in 2020 (-5.9%), which has already almost fully recovered (4.5% in January-September 2021). This recovery in GDP has been due to significant dynamism in Construction and in the agribusiness sector.
The health management of the pandemic allowed mobility to be reduced as little as possible and this avoided severe lockdowns, assisting workers who lost their jobs. For this, Uruguay has a key tool such as unemployment insurance, which allows companies to reduce their payroll and even so workers have an income for several months. At the worst moment of the pandemic, unemployment insurance grew from 46,000 people in February 2020 to 186,000 in April and May 2020. At the end of 2021 unemployment insurance reached 51,000.
Uruguay's strengths in this context are a financial system less exposed to exchange rate risk, less dollarization of public debt (approximately 10%) and the investor grade. Towards the end of 2021, Uruguay has not only maintained its investment grade but has also improved the debt outlook from one of the main risk rating agencies. This is explained by good macroeconomic management and especially the reduction of the structural fiscal deficit (without considering the short-term expenses to face the pandemic).
PwC Uruguay currently has offices located in Montevideo city, in the Free Zones of World Trade Center and Zonamerica, as well as in Punta del Este, with over 400 professionals trained in audit, accounting, tax, economics, information technology (IT), human resources, and operational management. This places PwC as one of the most developed professional services organisations in Uruguay.
Quick rates and dates
| Corporate income tax (CIT) rates | |
|---|---|
| Headline CIT rate (%) |
25 |
| Corporate income tax (CIT) due dates | |
|---|---|
| CIT return due date |
By the end of the fourth month following the date of the fiscal year-end. |
| CIT final payment due date |
By the end of the fourth month following the date of the fiscal year-end. |
| CIT estimated payment due dates |
Tax is paid monthly by way of advance payments. |
| Personal income tax (PIT) rates | |
|---|---|
| Headline PIT rate (%) |
Residents: 36; Non-residents: 12 |
| Personal income tax (PIT) due dates | |
|---|---|
| PIT return due date |
Residents: Between June and August, depending on the ID number. Non-residents: In May. |
| PIT final payment due date |
Residents: The first payment is due towards the end of August. Non-residents: In May. |
| PIT estimated payment due dates |
Residents - Labor income: Under employment relationship, tax is collected through monthly withholdings. Self-employed workers are required to make advanced payments on a bimonthly basis. Residents - Other incomes: Taxpayers must make advanced payments on a monthly basis. Non-Residents: Mainly collected by way of withholding on a monthly basis. |
| Value-added tax (VAT) rates | |
|---|---|
| Standard VAT rate (%) |
22 (reduced 10% VAT rate applicable to certain goods and services). |
| Withholding tax (WHT) rates | |
|---|---|
| WHT rates (%) (Dividends/Interest/Royalties) |
Resident: 0, 7, or 12 / 0, 7, or 12 / 0 or 12; Non-resident: 0 or 7 / 0, 7, or 12 / 0 or 12. Incomes obtained by entities resident, domiciled or located in LNTJs, are taxed at 25%. |
| Capital gains tax (CGT) rates | |
|---|---|
| Headline corporate capital gains tax rate (%) |
Capital gains are subject to CIT, taxed at 25% (there is no corporate capital gains tax in Uruguay). |
| Headline individual capital gains tax rate (%) |
There is no individual capital gains tax in Uruguay. Capital gains are subject to IRPF or IRNR, taxed at 12% (with some exceptions). |
| Net wealth/worth tax rates | |
|---|---|
| Headline net wealth/worth tax rate (%) |
Individuals are subject to NWT at a progressive scale of rates. For non-residents that are not subject to IRNR: 0.7% to 1.5%. For residents and non-residents subject to IRNR: 0.4% to 0.7%. |
| Inheritance and gift tax rates | |
|---|---|
| Headline inheritance tax rate (%) |
NA |
| Headline gift tax rate (%) |
NA |
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