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January 3, 2023

Uruguay Government proposes tax incentives to attract IT professionals

  • The Uruguayan Government has proposed tax incentives to attract qualified professionals in the Information Technology (IT) area.

Uruguay's Executive Power has submitted a bill to Parliament proposing that IT professionals who migrate to Uruguay could elect to be subject to NRIT (nonresidents income tax) at a flat rate of 12%, instead of PIT (personal income tax) at progressive rates that range from 0% to 36%, under the following conditions:

  • The election is applicable for technical and professional individuals who migrate to Uruguay as a consequence of a work agreement with companies that perform activities in the Uruguayan territory.
  • The individual should be a national from abroad, or a Uruguayan national that has not met the requirements for Uruguayan fiscal residence for the last five years.
  • The activities should be performed in the Uruguayan territory, which would be verified by physical presence of at least two-thirds of the calendar-year days spent in Uruguay.
  • The individual should confirm in writing of his/her decision to not be subject to the Uruguayan Social Security regime.
  • Work income in the Uruguayan territory should be derived exclusively under the dependence relationship regime, and for services rendered directly in relation to activities under literal S), article 52 of Title 4 (software regime).
  • The special regime could be elected only once and would last for the year of election and the four following years provided that all conditions are met.

This election is only applicable for work income arising from the abovementioned activities and labor agreements that are put in place no later than 28 February 2025.

The bill entered Parliament on 13 December 2022 and is currently under discussion in the representatives chamber. The bill can be accessed here.


For additional information with respect to this Alert, please contact the following:

EY Uruguay, Montevideo

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific