Individual - Significant developments

Last reviewed - 12 March 2024

Remote working: Free zone employees

On 14 October 2022, the National Direction of Free Zones (NDFZ) approved the regulations of the home office regime in free zones. Decree 319/022 reaffirms and widens the formalities to be accomplished by free zone users in order to implement the home office regime for their employees (allowed by Law Nbr 20,075).

The regulations (applicable as of 5 January 2023) provide that:

  • Employees included in the home office regime are the free zone user's dependent workers that accomplish the quality of full-time workers (as prescribed in their work contract), and their weekly workload cannot be less than 25 hours. Those who carry out production, distribution, or logistic activities will not be able to work remotely.
  • The employee and the free zone user must convene, at the beginning or during their work relation, the home office regime in the work contract.
  • Home office work should be carried out exclusively from the worker´s particular address located in the national territory.
  • The free zone user employer must accomplish a minimum of 1,000 hours per month as ’on-site‘ work in order for their workers to be able to apply the home office regime.
  • 90% of the workers enabled to do home office work must work, at a minimum, 60% of the monthly workload on-site. The remaining 10% can choose to work remotely 100% of their time.
  • Free zone developers must keep a record where it clearly validates the completion of the conditions and limits required for workers being able to do home office work.
  • These provisions were partly modified by the Accountability Law for Fiscal Year 2022, where among others, it was repealed the ‘1,000 hours per month’ requirement to apply for the home office regime. These amendments are applicable as from 1 January 2024. 

Law Nbr. 20,124: Modifications to income tax on resident individuals (IRPF)

On 24 March 2023, the Uruguayan Parliament approved Law Nbr. 20,124, which introduces amendments on IRPF, with the purpose of granting tax relief to taxpayers by means of the extension of certain deductions applicable to the taxation of employment income, as follows:

  • Increase in the annual amount of the deduction for dependent children, from approximately 1,900 to 2,900 United States dollars (USD).
  • Increase in the percentage of the tax credit for real estate leasing, from 6% to 8%.
  • Increase in the maximum limit of the cost of exclusive and permanent property to make use of the mortgage credit deduction, from approximately USD 120,000 to USD 151,000.