Uruguay Updates Tax Withholding Rules for Foreign Capital Gains
Uruguay's tax agency (DGI) has suspended IRPF withholdings and advance payments on capital gains earned from foreign sources. This change simplifies tax obligations for tax residents, including expats and digital nomads, who hold international investments or assets.
Uruguay Updates Tax Withholding Rules for Foreign Capital Gains
The Uruguayan tax agency (DGI) has issued a series of resolutions to pause income tax withholdings and advance payments on foreign-sourced capital gains. This administrative suspension, covering transactions from the start of the year through February, provides temporary breathing room as the government implements a broader tax framework under the latest National Budget Law.
While Uruguay has historically operated under a territorial tax system, recent changes mean tax residents now face a 12% tax rate on foreign capital gains from assets like shares and real estate. These latest resolutions stop the immediate collection of these taxes while the DGI finalizes the technical regulations for the new regime.
Who is affected
The suspension primarily impacts individuals who hold Uruguayan tax residency and earn income from foreign investments.
- Existing residents: If you obtained tax residency before 2026 and are currently using a tax holiday, your foreign-source income remains exempt for the remainder of your term.
- New residents: Those arriving now can still access an 11-year tax holiday on foreign capital gains, provided they spend more than 183 days in the country annually or meet specific investment thresholds.
- Digital nomads and tourists: If you are visiting on a short-term basis and do not hold tax residency, these tax changes do not apply to your foreign earnings.
What to know about the new rates
For residents who do not qualify for a tax holiday, the standard 12% rate applies, but there are several ways to manage the liability. You can choose a "deemed income" method to pay a smaller percentage of the total sale price, or use tax credits to offset what you have already paid to foreign governments.
New arrivals seeking the tax holiday should prepare for higher entry requirements. The real estate investment threshold has increased to approximately $2 million, though a more accessible path exists through a $100,000 annual investment into the National Development Agency. Stay tuned to our nomad news for further updates on these regulations.
Read our full Uruguay guide for the complete picture.