February 10, 2021
Uruguay modifies the 'tax holiday' regime
The modifications allow taxpayers to choose to be exempt from income tax on the income from foreign investments for 10 years, instead of five years. The modifications also allow more taxpayers to qualify for the 10-year exemption period.
In the last few months of 2020, Uruguay modified the "tax holiday" regime, which provides a temporary income tax exemption to new tax residents for income from foreign investments. Law No. 19,904 (September 2020) allows new tax residents to choose between:
Once the election is made, it will apply from 2020 and thereafter.
Law No. 19,937 (December 2020) extended the "10-year period" option to tax residents who benefited from the regime before 2020. To qualify for the 10-year period, individuals must meet the following conditions: