Uruguay is becoming an increasingly popular jurisdiction for tax residence. The trend is normally attributed to several factors: Uruguay’s democratic traditions, institutional stability, a business friendly Administration, and a solid management of the Covid-19 pandemic.
To strengthen the benefits of those acquiring the Uruguayan tax residence, in 2020 Uruguayan authorities added the following incentives.
(i) In June, the Executive Branch extended the notion of tax residence, making it possible to trigger such residence by prior acquisition of real estate properties located in Uruguay with a value exceeding approximately USD 400k.
Until then, the minimum threshold amounted to approximately USD 1,7 million.
(ii) In September, the Parliament extended to an eleven-year term the exemption over foreign-sourced income stemming from financial investments (which exemption benefits those who acquire the Uruguayan tax residence).
Until then, such tax holiday lasted six years. Such extension, however, was provided only for those individuals acquiring the Uruguayan tax residence as from 2020.
(iii) In December, the Parliament extended the 11-years tax holiday also to those individuals who had acquired tax residence in Uruguay prior to 2020. To benefit from the extension, such individuals are required to: (x) acquire real estate property with in Uruguay for a value exceeding approximately USD 400k, and (y) stay in Uruguay for not less than 60 days in the year. This incentive is yet to be implemented by applicable regulations.
