In view of Brazil’s recently enacted tax reform over foreign-sourced income, this Newsletter summarizes current status of Uruguayan tax laws vis-à-vis foreign-sourced income.
General taxation
- Individuals: 11-year tax holiday for foreign-sourced financial income (or a reduced rate of 7%, instead of the normal rate of 12%).
- Assets based abroad: untaxed.
- No inheritence taxes.
- Double taxation treaty with Brazil.
- Several platforms to channel investments/activities: free trade zones, free port regime, free airport regime, international trading of goods and services.
Taxation of offshore income
- Non-multinational groups: untaxed on foreign-sourced income.
- Foreign-sourced active income (non-passive income): untaxed.
- International trading: favorable tax regime.
- Holding companies untaxed: Uruguayan tax resident director (with adequate credentials) required.
- Non-holding companies: untaxed if local economic substance test is met.
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The above communication has been prepared just for information purposes. It cannot be construed as legal advice provided by Bergstein Abogados. Should you have any further questions, please feel free to contact Dr. Jonás Bergstein (jbergstein@bergsteinlaw.com) and/or Dr. Domingo Pereira (dpereira@bergsteinlaw.com).