Uruguay

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, in accordance with the provisions of Law Nbr. 19,996 and Decree Nbr. 319/022. Subsequent modifications on these provisions were introduced.

Current regulations provide, among others, that:

• Employees included in the home office regime are also the free zone user's dependent workers, except for those who carry out production, distribution, or logistic activities who 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.
• 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.

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.