Individual Income Tax in Uruguay

Individual Income Tax in Uruguay

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Individual Income Tax in Uruguay The Individual Income Tax (IRPF), in Uruguay, is regulated in Title VII of the 1996 Ordinance and amendments thereto. The purpose of this article is to provide information on the main aspects of this tax.

What is Individual Income Tax (IRPF)?

Individual income tax is an annual, personal and direct tax. This tax is levied on Uruguayan source income obtained by individuals.

What are the categories of IRPF?

Individual Income Tax can be classified into two categories:

  1. Category I: Income from capital, such as income from capital, income from real estate and capital gains.
  2. Category II: Income from work, both from dependent and independent work. Income included in the Tax on Income from Economic Activities (IRAE) is excluded.

It should be considered that this type of categories will be settled separately.

What is the taxable income for Individual Income Tax (IRPF)?

The taxable base of this tax will depend on the categories of income indicated above, as follows:

Category I

The sum of all computable income corresponding to capital yields and income of the same nature attributed, minus the deduction of the expenses allowed by the Law, such as the commission for property management, payments for Real Estate Contribution, and in case of subleases, the amount of the lease paid by the sublessor may be deducted if it is charged to the sublessor.

Category II

The sum of earned income, both within and outside a dependency relationship, it should be noted that the income outside a dependency relationship will be deducted 30% for expenses and in the case of income in dependency, bad debts will be subtracted in principle.

Likewise, it should be considered that the income and the deductions allowed by law must be determined on the one hand and the deductions allowed by law on the other hand, since in both cases the scales of income brackets and deductions established by the Law are applied, being that for the latter case the rates may be 8% or 10%. Once both are established, the difference will be taxed.

What is the IRPF rate?

The rates for this tax will also depend on the type of income and category in which they are.

For category I income, the rates will be 3% in the case of interest on deposits, debt securities for more than one year, and 5% in the case of interest on deposits for less than one year. Likewise, in the case of dividends the rate will be 7% and for the remaining income 12%.

In the case of work income corresponding to category II, there is a scale of income brackets and rates, so that a non-taxable minimum will be considered up to 84 Bases of Benefits and Contributions (BPC).

Subsequently, the following will follow:

More than the non-taxable minimum up to 120 BPC 

10%.
More than 120 BPC up to 180 BPC 

15%.

More than 180 BPC up to 360 BPC 

24%.

More than 360 BPC up to 600 BPC 

25%.

More than 600 BPC up to 900 BPC 

27%
More than 900 BPC up to 1380 BPC 

31%

More than 1,380 BPC 

36%

Who must file an IRPF Affidavit?

Individual taxpayers who obtain income from work, either as a dependent or independent worker. However, those whose income does not exceed 150,000 UI per year and whose income comes from a single employer and did not opt for the 5% reduction in the advances of the family nucleus regime will not be obliged to do so.

Neither those who render services outside the relationship of dependence but who have not had any income during the fiscal year.

In case of being obliged to file Form 1102 via web.Uruguay.

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