The Impuesto a las Rentas de Personas Físicas – IRPF (Individual Income Tax) in Uruguay is regulated in Title VII of the 1996 Ordinance and amendments thereto. This article provides 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:
- Category I: Income from capital, such as the return on thereof, income from real estate, and capital gains.
- Category II: Income from work, both from dependent and independent work. The income included in the Income Tax from Economic Activities is excluded.
It should be considered that these types of categories will be settled separately.
What is the tax base for IRPF?
The taxable base of this tax will depend on the categories of income indicated above, as follows:
The sum of all computable income corresponding to return on capital and income of the same nature attributed, minus the expense’s deduction allowed by the Law, such as the commission for property management, payments for Real Estate Contribution, and the deduction of the lease amount paid by the sublessor in charge, in case of subleases.
The sum of earned income will be deducted 30% for expenses in the case of independent workers and will subtract bad debts in the case of dependent ones.
Likewise, it should be considered that the income and deductions allowed by the Law must be determined, since in both cases, the scales of income brackets and deductions established by the Law are applied, being 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 the income of the categories, the rates will increase 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, 7% for dividends the rate and 12% for the remaining income.
In the case of work income corresponding to category II, there is a scale of income and rates brackets, considering a non-taxable minimum up to 84 Bases of Benefits and Contributions (BBC).
Subsequently, the following will follow:
More than the non-taxable minimum up to 120 BBC
|More than 120 BBC up to 180 BBC||
More than 180 BBC up to 360 BBC
More than 360 BBC up to 600 BBC
More than 600 BBC up to 900 BBC
|More than 900 BBC up to 1380 BBC||
|More than 1,380 BBC||
Who must file an IRPF Affidavit?
Individual taxpayers who obtain earned income, either as a dependent or independent worker. However, those whose income does not exceed 150,000 Tax Unit 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 dependence relationship but who have not had any income during the fiscal year.
The Form 1102 must be filed via web in case it is obliged.